Cromwell EREIT Management Pte. of Cromwell European Real Estate Investment Trust has announced the acquisition of 23 properties across five countries in Europe. These comprise 16 properties in the Netherlands, Finland and Poland, two properties in Italy, as well as five properties in France.
The Manager’s Chief Executive Officer, Simon Garing, commented, “The acquisitions represent an opportunity to accelerate the growth of CEREIT while also strengthening its defensiveness. They are expected to be earnings accretive, increasing CEREIT’s net property income, distributable income, and DPU yield. They will also provide us with access to two new countries that are among the fastest growing economies in Europe and deepen our presence in three countries in which we already operate. Assets in these countries are keenly sought by investors, but we are able to avoid bidding wars as our sponsor, Cromwell Property Group, has considerable pipeline sourcing capabilities. This enabled us to successfully negotiate deals to buy the properties off-market at a discount to their collective valuations. In addition, Cromwell Property Group employs extensive on-the-ground asset management teams across Europe, and already manages 16 of the 23 properties we are acquiring. This puts us in an especially strong position to extract value from the properties.”
“We are acquiring the properties at attractive yields and there is room for further upside from potential rental reversions and asset enhancement initiatives. In particular, we expect further uplift from the new properties and French properties as they have reversionary yields that are higher than their net initial yields,” added Mr Garing. “Moreover, the greater size as well as geographical, tenant and trade sector diversity that the Acquisitions bring, will also reduce concentration risks and enhance CEREIT’s resilience.”
The three Polish properties are the Riverside (with a purchase price of €31.3 million) and Grójecka 5 (€22.3 million) buildings in Warsaw as well as Arkońska Business Park (€18.2 million) in Gdańsk, which are currently owned by companies, associated Cromwell Property Group.