SINGAPORE (Dec 17): Cromwell European Real Estate Investment Trust (CEREIT) is disposing a portfolio of 12 light industrial and logistics properties in the Netherlands, Denmark and France for €65.7 million ($99.1 million), the manager announced Tuesday.

The agreed property sales price of the portfolio represents a 15.2% premium to the original purchase price. It is also a 4.1% premium to the latest market value of the portfolio, based on independent valuations conducted by Cushman & Wakefield Debenham Tie Leung and Colliers International Valuation UK as at June 30, 2019.

Through its subsidiaries, CEREIT will sell the portfolio by way of an asset sale for the Dutch and Danish assets and by way of a sale of shares of the French companies that own the French assets.

Taking into account the agreed property sales price for the Dutch and Danish assets, and the agreed share value based on the net assets of the French companies, the sales consideration works out to approximately €36.1 million.

The agreed sales price of the five Dutch assets – Antennestraat 46-76, Bohrweg Spijkenisse, Fahrenheitbaan, Harderwijkerstraat Deventer, and Nieuwgraaf – is €19.1 million, while the agreed sales price of the two Danish assets – Hjulmagervej 3-19 and CF Tietgensvej 10 – is €9.1 million.

Meanwhile, the provisional sales price of the French companies is €7.9 million, based on the estimated equity value of the companies, subject to a post-closing adjustment in accordance with the sale and purchase agreement.

The French companies own five assets in France: Parc de la Chauvetière, Parc de l'Esplanade, Parc des Aqueducs, Parc des Mardelles, and Parc Jules Guesde.

The manager of CEREIT says the disposal is consistent with its investment strategy of disposing of assets that either are not strategic or whose risk-return profile no longer fits CEREIT’s key objectives or benchmarks.

The manager points out that the estimated capital gains to be derived from the sale should be in excess of €5 million.

It adds that the sale proceeds will provide capital for accretive redeployment into more core assets to enhance CEREIT’s distribution per unit (DPU) and net asset value (NAV) per unit, and improve the overall risk-return profile of CEREIT’s portfolio.

“The €65.7 million disposal, spanning three European countries, follows our recent €19 million sale of Parc D’Osny in France and is consistent with our articulated strategy to recycle capital from asset sales where we see good opportunity to do so,” says Simon Garing, CEO of the manager.

“We will continue to use our extensive local knowledge and experience in the European office and light industrial / logistics real estate markets and research-backed investment process to redeploy capital into more ‘on theme’ and accretive opportunities,” he adds.

The disposal of the portfolio, to entities owned by funds advised by affiliates of The Blackstone Group Inc, is expected to be completed in February 2020.

As at 11.20am, units in CEREIT are trading 1 cent higher, or up 1.3%, at 80.5 cents.