Lendlease restructures lease at Sky Complex in Italy

Under the new lease, the starting annual rent for two buildings in the complex will be 1.5% higher.

Lendlease Global Commercial REIT (LREIT) inked a new lease agreement with Sky Italia S.r.l. (Sky), tenant of Sky Complex in Milan, Italy.

Sky rents three buildings in the complex.

Under the new lease, the starting annual rent for Buildings 1 and 2 will be 1.5% higher than the existing in-place rent for both buildings on the original lease.

“This increase is in addition to the recent positive 5.9% rental increase in May 2023,” the REIT said.

The new lease also states that the REIT will lease Buildings 1 and 2 to Sky for an initial term of nine years and one month commencing on 15 December 2023, with an option given to the Tenant to renew for an additional term of six years. 

Sky will not have the right to pre-terminate the new lease. In the old lease, Sky had the option to terminate its lease in 2026.

The new lease also provides that Sky will return Building 3 to Lendlease in 1Q24 upon the completion of its reinstatement works. Sky will also have to provide consideration to Lendlease of an amount equivalent to approximately two years of existing annual rent for Building 3.

In a bourse filing, Lendlease said the new lease will reduce tenant concentration risk, amongst others.

Following the return of Building 3, the LREIT will redesign the building for multi-tenancy use. 

“The transition will reduce LREIT’s single-tenant exposure to Sky whilst broadening the tenancy base for the property,” the REIT said.