[SINGAPORE] The distribution per unit (DPU) of Stoneweg European Real Estate Investment Trust (SERT) declined 3.7 per cent to 3.374 euro cents for the first quarter ended Mar 31, from 3.505 euro cents in the year-ago period.
This was despite a 2.4 per cent increase in net property income to 33.5 million euros (S$49.9 million), driven by higher rental income from assets and a reversal of bad-debt provisions.
Gross revenue was up 0.5 per cent to 53.6 million euros in the first quarter, with “stable leasing activity supporting income levels”, said the manager in a statement on Monday (Apr 28).
It attributed the lower DPU – as well as a 4 per cent fall in distributable income to 18.9 million euros, from 19.7 million euros – to higher interest costs in the quarter. Net interest cost, excluding amortised establishment costs, had risen 18.3 per cent to 9.4 million euros, from 7.9 million euros in the corresponding period last year.
This came from higher borrowings in the quarter following a bond issuance, as well as higher all-in interest rates – 3.66 per cent in Q1, from 3.13 per cent in the same period the year before, said the manager.
The Reit’s net asset value (NAV) consequently fell 2.5 per cent to 1.98 euros per unit, from 2.03 euros per unit, following the H2 2024 distribution paid in March.
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Its net gearing inched up to 41.7 per cent as at Mar 31, with an interest coverage ratio of 3.3 times.
Its weighted average debt expiry stood at 4.1 years, and weighted average lease expiry at 5.2 years – the longest in the Reit’s history, with nine of the top 10 tenant-customer leases now expiring beyond 2030, said Simon Garing, chief executive of the manager.
He added that the trust is trading on a yield of around 9 per cent, underpinned by a strengthening euro currency and an around 25 per cent discount to NAV per unit.
Garing said: “We continue to view (its) investment proposition as compelling, reflected in the board’s decision to commence a unit buyback during the current heightened volatility.
“We are actively taking strategic steps within (the Reit’s) portfolio to unlock value, generate alpha and catalyse positive unit price performance to close the gap to NAV per unit.”
In a separate bourse filing hours before, SERT announced that it had signed a 20-year lease renewal with NN Group for Haagse Poort, a distinctive-looking office building in the Central Business District of The Hague in the Netherlands.
The Reit said this lease renewal will be effective no later than December 2027, subject to municipality approvals.
The manager of SERT also signed a cooperation agreement with NN Group, its largest tenant, for asset enhancements of the building. Planned improvements include the addition of two atria, which add 2,500 sq m to the net leasable area of the building. The improvements will also make the building climate-neutral and energy-efficient.
Andreas Hoffmann, chief investment officer of the Reit’s manager, said: “Haagse Poort will become a leading prime office asset for energy efficiency in the Netherlands, offering high-quality amenities for NN Group employees.”
Units of SERT closed 2.3 per cent higher or S$0.05 to S$2.21 on Monday.
