CapitaLand Integrated Commercial Trust Gallileo

CapitaLand Integrated Commercial Trust (CICT) has secured the European Central Bank (ECB) as its new anchor tenant at Gallileo, the REIT’s office asset in Germany.

Gallileo is a 38-storey Grade A office building located in the banking district of Frankfurt am Main, Germany.

The ECB has signed a lease agreement with CapitaLand for a period of 10 years and the central bank will occupy close to 93% of the building’s total net lettable area.

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Starting from the second half of 2025, CapitaLand will progressively hand over the leased area to the ECB following the completion of the building’s ongoing asset enhancement initiatives (AEI), said the REIT on 12 March.

“This addition to CICT’s portfolio of high quality and reputable tenants further strengthens the trust’s income stability”, said Tony Tan, CEO of the REIT’s manager.

“The successful conclusion of this lease also serves as a testament of our efforts to transform Gallileo into a dynamic commercial development and an enduring financial and cultural landmark that will benefit Frankfurt and its residents”, he added.

Envisioned as a modern workplace of the future, we are significantly enhancing the building’s value by refurbishing its infrastructure and internal layout to promote a collaborative and community-oriented environment. The new Gallileo will continue to contribute to the vibrancy of the city centre and solidify the international reputation of Frankfurt.”

Since February 2024, CapitaLand has started upgrading works at Gallileo to improve the building’s existing infrastructure.

The AEI will take place in three phases with a primary focus on fulfilling the tenant’s building requirements, said the REIT.

Additional efforts will be undertaken to improve the mechanical, electrical and building automation systems, making Gallileo more environmentally and operationally efficient, the REIT added.

CapitaLand will be investing approximately EUR180 million in this AEI.

The anticipated duration for the completion of the AEI is estimated to take at least 18 months.

With this AEI, CapitaLand targets for Gallileo to obtain a minimum green rating of LEED Gold, in line with its 2030 Sustainability Master Plan, the REIT disclosed.

CapitaLand is also expected to soon conclude a lease agreement with the City of Frankfurt for the basement space in the Gallileo to be used by the English Theatre Frankfurt.

With the ECB and the City of Frankfurt as tenants, the building’s committed occupancy is expected to exceed 95%, said the REIT.

CICT was last done on the Singapore Exchange at SGD1.96, which presently implies a distribution yield of 5.48% according to data on the Singapore REITs table.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.