One positive consequence of the Covid-19 pandemic and the response to it is that there is an increase in lease extensions, observes Frankfurt-based DIC Asset.
The SDAX-listed company said in a statement that there is increased interest among tenant companies in lease extensions. Some tenants are even prepared to accept tougher conditions, the firm added.
“The trend appears to be motivated by the companies’ reluctance to relocate during the Covid 19 pandemic, among other reasons,” DIC Asset said in a statement.
The company cites examples of two recently renewed lease agreements for a combined floor area of around 25,900 sq m in properties in its commercial portfolio, which had €1.9 billion of assets under management at end-March.
These were a renewal of a lease to a public sector body of around 17,900 sq m in an office building in Mannheim. “The deal secured full occupancy of the property for another eight years,” DIC Asset stated.
Another example was product safety specialist UL International Germany which leases 8,000 sq m and about 120 parking spaces at the Red Square office building, Admiral-Rosendahl-Strasse, Neu-Isenburg, near Frankfurt am Main. The tenant extended its lease by around six years in this case.