Arena REIT (ASX:ARF) issued notices of default to Edge Early Learning, a childcare operator that leases 31 Arena-owned properties across Queensland and South Australia and represents about 14% of Arena's annual rental income, after failing to receive rent due on Aug. 3, according to a Monday Australian bourse filing.
The company said Edge requested a deferral or abatement of rent in late July as it pursues a corporate restructure, with Arena determining not to agree to the request and retaining McGrathNicol to assist with the matter.
Edge and its lender have up to 21 days from the notice being given to remedy the default, with Arena holding a pooled bank guarantee and security deposits totaling about AU$4 million from Edge securing its lease obligations, including cross default provisions applying across all properties leased from Arena, the filing added.
Arena said it is actively assessing a range of options available to it as landlord to protect rental income, preserve asset value and maximize long-term outcomes for security holders.
The company's shares fell almost 19% in recent Monday trade and earlier reached their lowest since October 2020.