Cromwell European REIT has entered a deal to acquire Challenger DPG France SAS, which holds three logistics properties in France, for around 21.6 million euros, the REIT manager said on Monday.
The acquisition is expected to be financed via debt and equity from the renounceable rights issue held recently, the REIT manager, Cromwell EREIT Management, said in a filing to SGX on Monday.
The logistics properties are located in Sully-sur-Loire, Parcay-Meslay and Villeneuve-lès-Béziers, the filing said.
The Sully property’s appraised value was 5.5 million euros as of 30 September, while the Parcay property’s was 5.9 million euros and the Beziers property’s was 10.4 million euros, the filing said.
This acquisition as well as that of two other French properties located in Aulnay-sous-bois and Gennevilliers and announced in October, will increase the REIT’s portfolio valuation by 2.6 percent, it said.
“The French properties will provide CEREIT with exposure to the attractive Greater Paris logistics market,” the REIT manager said. “The French Properties will also provide CEREIT with exposure to global retail and auto sector supply chains.”
The French properties have a net initial yield of 8.5 percent, compared with a net initial yield of 7.1 percent for the REIT’s existing portfolio of light industrial and logistics properties, the filing said. It added that the properties also have asset enhancement opportunities, including development and expansion potential.
The acquisition is expected to be completed between 21 January and 31 January, it said.