IREIT Global Secures €12.5 Million Loan Facility from CDL Subsidiary to Fund Berlin Campus Project
Key Highlights from the Announcement
- New Loan Facility: IREIT Global, managed by IREIT Global Group Pte. Ltd., has announced that DBS Trustee Limited, acting as trustee for IREIT, has entered into a two-year €12,500,000 term loan facility agreement with City Strategic Equity Pte. Ltd. (a wholly-owned subsidiary of City Developments Limited, or CDL).
- Purpose of the Facility: The loan is intended to finance part of the construction costs associated with repositioning the Berlin Campus property. The property is being transformed from a single-let asset into a multi-let, mixed-use development, signifying a strategic shift to enhance asset value and income diversification.
- Interest Rate and Terms: The facility bears an interest rate comprising a loan margin of 3.55% per annum plus the prevailing EURIBOR. Utilisation of the facility is subject to standard conditions precedent.
Important Details for Investors and Shareholders
- Mandatory Prepayment Event: Under Rule 704(31) of the SGX Listing Manual, the facility agreement contains a “Change of Control Condition.” If neither CDL nor any of its wholly-owned subsidiaries remains a substantial shareholder of IREIT Global’s Manager, a mandatory prepayment of the loan will be triggered. This is a material covenant that could impact the trust’s financial position if breached.
- Potential Impact on Total Borrowings: If the full amount of this new facility is drawn down, the aggregate level of IREIT’s facilities that may be affected by a breach of the Change of Control Condition is approximately €443.46 million (S\$669.62 million, based on an assumed exchange rate of €1.00 : S\$1.51). This is a significant portion of IREIT’s total borrowings and could influence credit metrics and refinancing risks.
- Current Status: As of the announcement date (24 December 2025), the Change of Control Condition has not occurred. The Manager has indicated that CDL (or its subsidiaries) remains a substantial shareholder.
Price-Sensitive Information and Implications
- The facility signals strategic investment in asset repositioning, which could enhance the long-term value and income stability of IREIT’s portfolio, potentially supporting future distributions and unit price.
- However, the inclusion of a material adverse change clause linked to CDL’s ownership could introduce refinancing risk should there be a change in control. Investors should monitor any developments regarding CDL’s shareholding as these could lead to significant changes in IREIT’s debt obligations and financial flexibility.
- The relatively high loan margin (3.55% above EURIBOR) reflects current credit market conditions and could affect the overall cost of debt and distributable income.
Other Important Notices
- This announcement is for information purposes only and does not constitute an offer or solicitation for any securities of IREIT in any jurisdiction.
- The past performance of IREIT is not indicative of future results. The announcement contains forward-looking statements subject to risks, uncertainties, and assumptions. Actual outcomes may differ materially due to factors such as economic conditions, interest rates, capital availability, rental income trends, operating expenses, and regulatory changes.
- Units in IREIT are not guaranteed by the Manager or its affiliates, and their value, as well as income derived, may fluctuate. Investors are advised to trade units through the SGX-ST and note that liquidity is not guaranteed.
- This publication has not been reviewed by the Monetary Authority of Singapore.
Disclaimer: This article is a summary of a public disclosure by IREIT Global Group Pte. Ltd. and is intended for informational purposes only. It does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. Past performance is not a guarantee of future returns.
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