This article was originally published on Friday, 15 February 2019 at 8:53 A.M. SGT; it has since been updated.
Cromwell European REIT said on Friday it acquired a logistics property in Gennevilliers, France, from Challenger DPG France II SAS for 6.9 million euros (S$10.58 million or US$7.79 million).
But it opted not to complete the acquisition of a French property in Aulnay-sous-Bois, which was under option from Challenger DPG France II SAS and was previously announced in October, it said in a filing to SGX before the market open on Friday.
That was because the manager wasn’t satisfied with the outcome of its due diligence, the filing said.
The Gennevilliers property, which was build in 2003 and is around 9 kilometers from Paris, has a leasehold of 29 years and 7,620 square meters of lettable area, the REIT said. The building is currently leased to GRDF, a French state-backed company, it said.
The REIT said the acquisition would provide exposure to the Greater Paris logistics market, which is attractive, and offered a net initial yield of 9.9 percent, compared with 7.1 percent for its existing light industrial and logistics portfolio. The property also offers opportunities for asset enhancement or expansion potential, it said.
“This demonstrates CEREIT’s ability to acquire properties on attractive terms via off market transactions,” the filing said.
The total acquisition cost, including an acquisition fee to the REIT manager and the real-estate transfer tax, will be 7.5 million euros, the filing said.
The deal was funded with the proceeds of its rights issue and internal cash resources, it said.
In addition, Cromwell European REIT said it had completed the acquisition of three office assets in Poland, a deal originally announced in October, for 69.38 million euros. The deal was funded by the proceeds of its rights issue and debt facilities, it said.
After the completion of the deals, the portfolio has 97 properties across Denmark, Finland, France, Germany, Italy, the Netherlands and Poland, it said.