GPA Terminates Lease Contract with Bresco´s Real Estate Investment Fund (BRCO11)

The early termination penalty is set at just 3 months' worth of rent, with a required notice period of 9 months
Other major retail giants have also notified the exit of additional assets owned by the same fund

The GPA CD04 property is located on the Jaraguá Tourist Road in São Paulo and is considered a standalone

By: SiiLA News

10/20/2023

GPA Group is set to vacate 35,000 square meter area it currently occupies in the standalone warehouse, GPA CD04, located on the Jaraguá Tourist Road in São Paulo. The news became public this week following a material fact from Bresco Logística (BRCO11), the fund manager, which owns the property.

According to the announcement, GPA has notified in advance that it will terminate the lease contract, originally signed in June 2018 and scheduled to run until 2028.

The contract stipulates a nine-month notice period for vacating the property and an indemnity fine equivalent to three times the current rent. Additionally, the property constitutes 9.1% of the total area owned by the FII.

On internet forums, investors are discussing the fund's departure: 'The fund, which is a favorite among analysts, has just released a report indicating that CBD will return 100% of the GPA property. There's a 9% increase in vacancy, a 9-month notice period, and a relatively small penalty,' mentioned a user on the Clube Fii platform forum.

Other retail giants have notified their exit from logistics assets in the FII BRC11 fund

"Bresco Contagem" is another asset that has recently experienced contract disruptions. | Photo: Bresco

The fund has been experiencing a significant impact due to the vacancy of its assets . In recent months, in addition to the major player in the food industry, Carrefour, another company in the same sector, announced its intention to vacate over 20,000 square meters of Bresco Contagem, another asset held by the fund. In July, the retail giant, Magazine Luiza, revealed a partial termination of their lease for 6,597 square meters within the same development.

In June, GPA reached a legal settlement with Bresco regarding the early termination of another lease contract, Bresco São Paulo, in which the group agreed to pay a sum of R$12 million to the fund. Altogether, the BRCO11 portfolio includes ten properties, comprising standalone warehouses and top-tier industrial properties such as Bresco Bahia, Bresco Contagem, and Bresco Resende.

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