IReit Global tenant to vacate property accounting for 11% of total gross rental income when lease expires in 2022

AN IReit Global UD1U : UD1U 0% tenant intends to vacate a property that accounts for about 11 per cent of the real estate investment trust's (Reit) total gross rental income, the Reit's manager announced on Friday (Nov 5) night in a Singapore Exchange filing.

This will be when the lease expires on Nov 29, 2022. As such, the Reit's manager does not expect any material impact on the Reit's distribution per unit for the financial years ending 2021 and 2022.

GMG Generalmietgesellschaft is the sole tenant at Darmstadt Campus. The space to be vacated there constitutes 7.9 per cent of IReit Global's total portfolio lettable area as at Sep 30.

GMG, a unit of Deutsche Telekom AG, is also a tenant in Bonn Campus and Munster Campus. Its Darmstadt Campus lease is independent and separate from these other 2 leases.

IReit's manager said that since December 2019, it has been focused on diversifying the Reit's portfolio and tenant base out of Germany, acquiring a portfolio of 27 retail properties in France and 5 multi-tenanted office properties in Spain.

As a result of this, GMG's contribution to IReit's total gross rental income has decreased from 50.9 per cent as at Sep 30, 2019 to 32 per cent 2 years later.

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Correspondingly, the contribution by Darmstadt Campus to IReit's total gross rental income has fallen from 18.4 per cent to 11 per cent.

The Reit manager said it "will continue to channel its efforts on lease management as well as pursue acquisitions to strengthen IReit's lease profile and build further scale and diversification to IReit's portfolio".

It will now start marketing the Darmstadt Campus "and is exploring a multi-let approach to broaden the tenant mix at the property and reduce the reliance on any one single tenant".

With the 1-year notice period, "there is adequate time to re-let the property to new tenants, as the property is in a prime office location and within a short walking distance to Darmstadt's main railway station," it added.

Units in IReit Global closed unchanged at S$0.65 on Friday before the news.