SINGAPORE (Nov 28): The manager of Cromwell European REIT (CEREIT) on Wednesday reported distribution per unit (DPU) for the period ranging from listing date Nov 30 2017 to Sept 30 came in at EUR 0.0361, 1.9% higher than the IPO forecast and translating to an annualised distribution yield of 7.9%, 13 basis points higher than expected.
Income available for distribution to unitholders amounted to EUR 57.2 million, 1.9% above the EUR 56.1 million forecast at IPO, in line with the higher income available for distribution to unitholders.
CEREIT recorded gross revenue amounting to EUR 104.3 million during the reporting period, 2% above the IPO forecast of EUR 102.3 million, while net property income (NPI) came in at EUR 69.3 million, 4.3% higher than projected. This was mainly due to the strong performance from its Pan-European light industrial portfolio which generated EUR 2.5 million more in NPI than forecast on the back of better-than-projected leasing outcomes in France and the Netherlands. CEREIT’s office portfolio and other assets also performed well, largely in line with expectations.
During the third quarter ended Sept 30, the manager renewed 9,145 sqm of leases in the light industrial / logistics portfolio and 261 sq m of leases in the office portfolio during the quarter. As a result of the manager’s active asset and portfolio management, CEREIT’s portfolio occupancy rate increased by 1.9 percentage points, from 87.7% as stated in the prospectus to 89.6% as at Sept 30, while its weighted average lease expiry (WALE) profile remains stable at 4.9 years.
Looking ahead, manager Cromwell EREIT Management says European commercial real estate remains keenly sought after as global investors recognise the relative strength of the eurozone economy and healthy occupier markets in the region, notwithstanding the noise of global uncertainties.
Meanwhile, Cromwell Property Group, sponsor of CEREIT and 35.3% owner, announced on the Australian Securities Exchange it is undertaking a rights issue to raise proceeds of up to A$210 million to fund Cromwell’s CEREIT investment and to initially repay debt.
The issue price of A$0.98 per security represents a 4.9% discount to Cromwell’s last close price of A$1.030 on Nov 23.
On Oct 31, CEREIT announced the acquisition of 23 properties across three portfolios in Europe with a total purchase price of EUR 384 million ($597 million), to be partially equity funded through an equity raising of $350 million.
See: Cromwell European REIT buying 23 properties for $605 mil; to partly fund with rights issue
Units in CEREIT are down 4.4% at EUR 0.44.