City BKK leases surrender agreed in Hamburg

RNS Number : 3610E

Schroder Eur Real Est Inv Trust PLC

09 February 2018

 

9 February 2018

Schroder European Real Estate Investment Trust Plc

CITY BKK LEASE SURRENDER AGREED IN HAMBURG

Schroder European Real Estate Investment Trust Plc ("SERE" or the "Company"), the company investing in European growth cities, announces that it has agreed terms for City BKK to surrender its lease at the Hamburg office asset in Germany, in return for a cash payment to the Company of €3.9 million. This cash payment represents 4.7 years of annual rental income from City BKK.  

Negotiating a surrender with City BKK was a key initiative within the acquisition strategy. The agreement gives SERE the opportunity to re-position the property, re-leasing the space into a strengthening office sub-market and diversifying the property's income profile.

The building is located in the fast growing City Süd district, where vacancy rates have fallen substantially to approximately 5% since the Company's acquisition. This has been led by strong take up, as occupiers perceive the City Süd district as providing better value relative to the neighboring city centre, combined with reduction of supply via the conversion of office accommodation to residential and hotel uses.

Jeff O'Dwyer, Fund Manager of Schroder REIM, commented: "The surrender payment realises an immediate return for the Company, part of which will be reinvested into the asset to take advantage of  favourable office demand conditions and improve the assets longer-term income profile."

Enquiries:

Duncan Owen/Jeff O'Dwyer

Schroder Real Estate Investment Management Limited                Tel: [phone]

Ria Vavakis

Schroder Investment Management Limited                                   Tel: [phone]

Dido Laurimore/Richard Gotla/Ellie Sweeney                                Tel: [phone]

FTI Consulting   

 

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