“The rationale for investing in IREIT Global is to help us build recurring income and increase exposure in continental Europe. It also gives us the ability to recycle capital. We can buy value-add properties, fix them and inject them into the REIT,” Khoo explains. The short-term challenge is twofold. First, commercial properties in Europe are in demand, with the shift of headquarters following a no-deal Brexit; thus, accretive acquisitions are difficult to do. Second, IREIT Global itself has been under the radar. “The short-term challenge is, we are trying to help IREIT Global raise its profile and grow its AUM,” says Khoo.
SINGAPORE (Aug 19): City Developments’ fund management segment under chief investment officer Frank Khoo appears to be taking shape. He has a target of $5 billion in assets under management (AUM) to be achieved by 2023, excluding the Profit Participation Securities (PPS), which are being gradually unwound. Since coming on board last year, Khoo has boosted CDL’s AUM by more than $2 billion (see table).
In April, CDL acquired a 50% stake in IREIT Global’s manager and a 12.4% stake in the real estate investment trust for a total of $77.8 million. The company subsequently raised its stake in the REIT to 12.5%. IREIT Global owns five freehold office campuses in Germany with a total net lettable area (NLA) of more than 200,600 sq m and an occupancy rate of 98.6%. The portfolio is valued at €504.9 million ($778 million).
