EUROPE-FOCUSED real estate investment trust (Reit) IReit Global has signed a lease contract with UK hotel chain Premier Inn for 10,348 square metres or 12 per cent of net lettable space in its Berlin Campus asset.
The Reit’s manager said on Thursday (Nov 28) that the lease agreement is for a long lease period of 20 years with no break option, and an annual rent of about 2.2 million euros (S$3.1 million) with built-in annual rental escalation.
The rental escalation is expected to boost the annual rent to around 2.6 million euros in the fourth year under the lease agreement, which is expected to start from the first half of 2027 upon the completion of refurbishment works.
The lease will also benefit from an annual indexation following the rental escalation period.
This marks the first lease commitment as part of IReit Global’s 42 million euro project to refurbish and transform Berlin Campus into a multi-use asset with office, retail and hospitality components.
Refurbishment works for the project are expected to commence in the second quarter of 2025, and will be funded by a mixture of cash and debt, said the manager.
The manager’s new chief executive Peter Viens earlier said that the move is part of efforts to diversity the tenant base and reduce the risk of Berlin Campus, which is the Reit’s largest asset.
Units of IReit Global closed flat on Wednesday at S$0.28.
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