Elite Commercial REIT invests $22.7m to improve UK-occupied assets

The asset enhancement works will take about three years.

The Elite Commercial REIT Management Pte. Ltd. (REIT), will invest $22.7m (£12.5m) to conduct asset enhancement works occupied by the UK’s Department for Work and Pensions (DWP).

In a statement, the REIT said it signed separate agreements with its tenant, The Secretary of State for Levelling Up, Housing and Communities of the UK for the enhancement works, which would target sustainability and climate adaptation requirements.

Under the agreement, the REIT’s investment will take about three years to undergo the asset enhancement works “to improve sustainability and energy efficiency credentials of properties in its portfolio that are occupied by DWP.” This is also the REIT’s first collaboration with the DWP to bolster “sustainability and energy efficiency of their occupied Estate.”

It also complies with the UK government’s vow to attain net-zero carbon emissions by 2050, said the REIT.

Asset enhancement works meeting pre-agreed criteria will include repair, replacement or upgrade of lighting systems, heating and cooling systems, insulation and solar panels and other initiatives to improve the Energy Performance Certificate ratings of the REIT properties which are occupied by the DWP.

CEO Shaldine Wang said the retrofitting works to improve energy efficiency ratings will reduce environmental woes.

“This win-win initiative demonstrates our commitment to adapt our portfolio to address sustainability and climate change requirements, and to extend the relevance of our assets to tenants,” Wang said.

Meanwhile, the REIT and DWP also agreed to re-gear a significant number of leases of DWP-occupied by removing lease break options. 

Lease break options have been removed from the leases for 100 of the 117 DWP-occupied assets which had break clauses happening next year. Following the lease re-gearing, 78.6% of the leases by total portfolio by gross rental income will continue straight to 2028 without any lease break options.

$1 = £0.55