Secure Property Development and Investment PLC, the South Eastern European focused property and investment company, announce the signing of a lease agreement with Aquila SRL, a large Romanian logistics operator, for 5,740 sqm of ambient space in the Company’s Innovations Logistics Park in Bucharest, Romania.
Under the terms of the Agreement, the annual rent payable by Aquila to the Company is ~€300,000, which increases the Company’s current net rental income by almost 10 per cent.
The Innovations Park is a Class A warehouse located in the area of Clinceni, south west of the centre of Bucharest, just off the city’s ring road and 6 km from Bucharest-Pitesti (A1) highway. It comprises four separate warehouses, two of which offer cold storage.
Out of a total gross leasable area of 16,570 sqm, approximately one third is suitable for cold storage with the remaining comprised of multipurpose warehousing space and of office space (together referred to as the ambient section). The Agreement completes the leasing of the entire ambient warehouse section of the Terminal, with the other 3,870 sqm leased to two Romanian companies producing and selling Structural Insulated Panels (SIPs) Europe-wide. The Company continues to talk to a number of prospective tenants with regards to leasing the cold storage space and will update the market as and when it is appropriate to do so.
The Agreement follows the early termination of the rental contract between the Company and Nestle Ice Cream Romania (‘Nestlé România’) covering approximately 60 per cent. of the leasable area of the Innovations Park. As announced on 11 August 2016, Nestlé România paid SPDI a fee of €1.39 million in settlement of the termination of the rental contract, which was due to expire in September 2018. The fee paid represented approximately 1.5 years’ worth of rental income that would have been due from Nestlé România in the event it had not terminated the lease.
Lambros G. Anagnostopoulos, Chief Executive Officer, said, “As with all our core income producing assets, which include logistics terminals in Athens and Bucharest, offices in Bucharest, as well as a retail Big Box property in Craiova, Romania, the Innovations Park is prime real estate with an excellent location in the capital city of a fast-growing and/or strategically important European Union economy. “At €300,000 per annum, today’s lease agreement with Aquila increases the Company’s current net rental income by almost 10% and in our view it also demonstrates the quality of our asset base. As at 30 June 2016, the Company’s Net Asset Value stood at more than €41 million, which is almost two and half times our current market capitalisation, even after the profitable sale of Terminal Brovary in January earlier this year. As we focus on transforming SPDI into the leading London listed property company focused on selected South East European countries, we expect to see the wide discount between our market capitalisation and our net asset value narrow.”
(source: Secure Property Development)