2015, the prospects for the German market seem to be
bright and we are optimistic that we are able to secure
investment opportunities.
The Euro has weakened considerably in the later part
of 2014. On the back of the quantitative easing program
launched by the European Central Bank, the market
expectation is that the Euro will continue to remain
weak against most currencies in 2015. As IREIT’s cash
flows from its property leasing operations in Germany
are denominated in Euros, and its properties are also
funded by Euro-denominated bank borrowings, this
provides a natural hedge. In contrast, at the trust level,
IREIT receives its distributable income in Euros but pays
out distributions to Unitholders in Singapore dollars on a
semi-annual basis. In viewof the weakening of the Euro,
we made the decision to fully hedge the distributable
income for 2014 and 2015 at the average hedge rate
of approximately S$1.68 per Euro and S$1.55 per Euro,
respectively. Furthermore, we are closely monitoring
the Euro-Singapore dollar exchange rate and will hedge
distributable income for future periods, when and if
appropriate.
On the other hand, the weak Euro is helping to fuel
the real estate investment market. Investor sentiment
is rising and the cost of lending from German banks is
trending lower. This augurswell for our acquisition plans
going forward.
In conclusion, we believe our investment strategy
coupled with our prudent capital management will
succeed in fulfilling our commitment to deliver the best
possible returns to our Unitholders in future.
Appreciation
On behalf of the Board, we thank the IREIT team,
professionals and advisors for their contributions to
the IPO and IREIT’s daily operations. We would also
like to thank our Board colleagues for their insights and
commitment to IREIT.
To all our Unitholders, thank you for sharing our vision,
and to our tenants, business partners and investors,
thank you for your support. The Board looks to the future
with optimism and believes IREIT has the market reach
and the strategy to build our portfolio and to achieve
its goals.
Mr LimKokMin, John
Chairman
Mr Itzhak Sella
Chief Executive Officer (“CEO”)
31 March 2015
IREIT Global
annual report 2014
Chairman & CEO
Letter to Unitholders
