IREIT Global has secured a tenant for all five floors of office space that will be vacated by GMG at Münster Campus when its lease expires in March 2022.

The new tenant is a German municipal association that operates special schools and offers aid to people with disabilities.

Under the lease agreement, the new tenant will take up one upper floor at Münster North building and four upper floors at Münster South building.

Related: IREIT Global loses another GMG lease

The lease will be taken up via a two-step process – one upper floor at Münster South building starting from 1 April 2022 and the remaining four floors starting from 1 September 2022.

The lease with the new tenant, which is secured at rental rates similar to GMG’s lease, will expire on 31 December 2027 and incorporates two prolongation options of five years each.

In addition, the tenant has been granted an option to occupy two additional floors at Münster North building if the space becomes available, said IREIT.

“The successful leasing of all the office space at Münster Campus well ahead of GMG’s lease expiry in March 2022 reflects the strong attributes of our property and exemplifies our strong focus on active asset management”, said Louis d’Estienne d’Orves, CEO of IREIT’s manager.

“The quality five-year lease with prolongation options secured with the new tenant will strengthen IREIT’s lease profile and income certainty”, he added.

Taking into account the new lease with the tenant, the office space at Münster Campus would be 100% occupied from September 2022 onwards with only the storage space at the basement of Münster South building still vacant.

This would substantially increase the overall occupancy rate of Münster Campus to 95.7% from 64.0% if GMG were to vacate in April 2022 without the new lease, said the REIT.

On a pro forma basis, the WALE of Münster Campus would have improved from 2.9 years to 4.9 years as at 30 September 2021, while that of IREIT’s portfolio would have improved from 4.0 years to 4.2 years.

IREIT will continue to implement its multi-let strategy to diversify its tenant base and enhance its lease profile, as well as pursue acquisitions to build scale and diversification, said its manager.

IREIT was last done on the SGX at SGD0.635, which presently implies a distribution yield of 7.24% according to data on the Singapore REITs table.