ESR-Reit recovers around 75% of outstanding arrears from Australia rent default

[SINGAPORE] ESR-Reit has recovered around 75 per cent of outstanding arrears resulting from a default in rental payments at some of its Australian properties.

This leaves A$3 million (US$2.1 million) in outstanding arrears, after they were recovered through the partial drawdown of the banker’s guarantees, the manager of the real estate investment trust (Reit) said on Tuesday (Oct 6).

In August, ACFS Port Logistics defaulted on rent payments for three Australia properties it leased from ESR-Reit, resulting in arrears of A$12.2 million.

Then, the manager noted that drawdown and offset of bank guarantees held by ESR-Reit will reduce outstanding arrears to around A$1.5 million.

As at Sep 30, the bankers’ guarantees held in relation to the ACFS leases stood at A$400,000.

The Reit has also received all rent payments due for the period since Aug 13, and the manager expects to continue receiving rent payments while the tenant continues to use the properties.

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The manager has issued breach notices to ACFS to replace the bankers’ guarantees, in line with the terms of the leases, and will continue to pursue available options for recovery of the remaining balance of the outstanding arrears, it said.

Units of ESR-Reit closed flat at S$2.04 on Tuesday, before the announcement.