City BKK leases surrender agreed in Hamburg
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: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
Dido Laurimore/Richard Gotla/Ellie Sweeney Tel: 020 3727 1000
FTI Consulting
This information is provided by RNS
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