IREIT Global has secured a “pivotal anchor lease” with a German federal government body to take up around 6,200 sqm (66,736.24 sq ft) of office space and 1,400 sqm of storage space at Darmstadt Campus. The space represents about 25% of the property’s total lettable area.
The REIT’s latest tenant is a 100%-owned agency of The State of Hesse. The agency does construction and property/facility management on behalf of the state.
The lease will last for 15 years and will commence on June 1. It will have two prolongation options of five years.
With rents secured at market levels, the lease will generate an annual rental income of approximately EUR1.2 million ($1.8 million).
The new lease was concluded around four months after the campus’ previous sole tenant, Deutsche Telekom subsidiary, GMG Generalmietgesellschaft mbH, had vacated.
On a pro forma basis, the new lease would have improved IREIT’s portfolio’s overall occupancy rate by two percentage points to 90.3% from 88.3% as at Dec 31, 2022. The overall weighted average lease expiry would have improved from 5.0 years to 5.2 years.
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“We are very pleased to have achieved this breakthrough within such a short period of time. This demonstrates the quality of our property and operating team on the ground. With the lease only expiring in 2038, it will further help to improve the long-term stability of IREIT’s portfolio performance and spur increased interest among other current interested parties to commit leases with us,” says Louis d’Estienne d’Orves, CEO of the manager.
“Our key focus for 2023 and the immediate future is to continue to actively engage our existing tenants while attracting new occupiers to strengthen our tenant mix. We will also continue to pursue investment opportunities to further diversify and grow IREIT’s income streams and mitigate any impact on IREIT’s future distributions,” he adds.
Looking ahead, Berlin Campus’s sole lease expiry is due in June 2024. The manager says it has been “actively engaging the tenant while exploring various options on the property”.
