Elite Commercial REIT, on Feb 28, announced that it has embarked on its first sustainability collaboration with its tenant, the Department for Work and Pensions (DWP) in the UK.
The DWP is the UK government’s biggest public service department.
The REIT had signed separate agreements with its tenant to undertake asset enhancement works across its assets occupied by the DWP to target sustainability and climate adaptation requirements.
Under the agreements, the REIT will invest £12.5 million ($22.7 million) over three years to improve the sustainability and energy efficiency credentials of the properties occupied by the DWP.
The move comes in line with the UK government’s commitment to achieving net zero carbon emissions by 2050, says the REIT manager in its Feb 28 release.
The asset enhancement works include the repair, replacement or upgrade of the lighting systems, heating and cooling systems, insulation and solar panels, and other initiatives upon pre-agreed criteria.
See also: Changes in ICR, leverage to come into effect immediately, with additional disclosures in March
The investment will contribute towards reducing the portfolio’s environmental impact, says Shaldine Wang, CEO of the manager.
Separately, Elite Commercial REIT and DWP have also agreed to re-gear a significant number of leases of DWP-occupied properties by removing lease break options.
Lease break options have been removed from the leases for 100 of the 117 DWP-occupied assets which had break clauses occurring in 2023. Following the lease re-gearing, 78.6% of the leases by total portfolio by gross rental income4 will continue straight to 2028 without any lease break options.
See also: IREIT signs 20-year lease contract with UK hotel chain, Premier Inn, in Berlin Campus
Units in Elite Commercial REIT closed 2 British pence higher or 3.23% up at 63.5 British pence on March 1.
Photo: Elite Commercial REIT
