The possible departure of DRV has been flagged by the REIT earlier.
According to the REIT's manager, it is in talks with a "leading hotel brand" and long-stay hospitality operators to lease the hospitality space.
“The departure of DRV presents the unique opportunity for us to revitalise the property and enhance its value proposition in the market. We believe the repositioned Property could benefit from substantially increased rent rates (as compared to its current rent)," says Louis d’Estienne d’Orves, CEO of the manger.
"We are also in exclusive discussions with a leading hotel brand and long-stay operator to lease about a quarter of the total lettable space," he adds.
"We believe this strategic repositioning will provide contemporary and versatile spaces, and ensure sustainable value and diversification for IREIT in the long-term," he says.
According to IREIT, it is now exploring ways to mitigate the expected decrease in distributions per unit while works for the repositioning of the property are on-going.
They include making one or more top-up distributions during the repositioning works from the proceeds from the divestment of Il∙lumina and/or the dilapidation costs payable by DRV under the terms of its lease.
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Last July, as part of the lease extension to December 31, DRV had agreed to pay a revised rent some 45% higher than its current office rent from July 1 onwards.
In addition, DRV will pay a lump-sum amount of €15.5 million by June 30, equivalent to over 16 months of its total current rent, as compensation for the dilapidation costs to reinstate Berlin Campus back to its original state.
