CG malls europe - Commerz Real

The vacancy rate is reported in relation to the let floor space (sqm) and to the rental
income (base rent) to be realised. Since Multi Development, the developer and purchaser
of the malls, is paying rent guarantees, additional vacancy rates were posted which
would result from a termination of the rent guarantee. In Montijo, rent guarantee payments
were made for a vacant space and for a let space (to offset the difference between
the contractually agreed rent and the rent actually paid by the tenant) as at 31 December
2009. In Léon, rent guarantee payments were made for five vacant retail units and
for seven let units as at 31 December 2009. Difficult as it was, the year 2009 did see the
successful extension of 17.5% of all portfolio leases (in terms of rental income). Almada
accounted for 7.5%, Montijo for 37.5% and León for 20.3% of these lease renewals.
Regrettably, it proved impossible to re-let all of the floor space. The number of rent
discounts granted to tenants also went up in 2009. Tenants requested rent-free period
less often than they did discounts / bonifications on the existing rent level. In Almada,
we granted rent-free periods to a total of 6 tenants and discounts / bonifications to a total
of 50 tenants in 2009. In Montijo, we granted rent-free periods to 9 tenants and discounts
/ bonifications to 26 tenants in 2009. In León, finally, we granted rent-free periods to 5
tenants and discounts / bonifications to 25 tenants in 2009.
The following chart and table show the portfolio’s lease expiration profile for the future:
Lease Expiration in % of total rental income
Lease Expiration in % of Total Rental Income as at 31 December 2009
40%
35%
30%
25%
20%
32.1%
15%
10%
5%
4.4% 4.1%
12.4%
6.0%
14.1%
1.4%
4.9% 5.8%
3.4%
11.4%
0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020+
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019+
In the wake of the massive reletting activities in Almada (2008), Montijo (2009) and León
(2009), the lease expiration profile has completely changed. The percentage of expiring
leases in relation to the base rent over the next three years equalled 20.9% by 31
December 2009, and is significant lower compared to the terms of 2008 and 2009. Due
to the customarily six-year lease terms in Portugal and the customary five-year lease
terms in Spain, the next wave of letting activities is to be expected for 2014 (Almada and
León) and 2015 (Montijo). These extensive new lettings are likely to offer opportunities
for reshuffling the existing sector and tenant roster once the economic environment
improves. In addition, it is also a chance to adjust the agreed base rent whenever appropriate
and – in case of the Portuguese properties – to collect extra cash and future income
through key money and renewal fee payments.
Property Report
Year of Expiration in %
2010 4.4%
2011 4.1%
2012 12.4%
2013 6.0%
2014 32.1%
2015 14.1%
2016 1.4%
2017 4.9%
2018 5.8%
2019 3.4%
2020+ 11.4%
100.0%
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