Cromwell European REIT to divest French property at premium to valuation

Euro coinsPhoto by Leslie Shaffer

Cromwell European REIT has entered a deal to divest the Parc de Popey asset, located 250 km east of Paris, to an affiliate of a European boutique real estate investment fund for 5.8 million euros, or around S$9.3 million, the Singapore-listed REIT’s manager said in a filing to SGX Tuesday.

The sale price is an around 53 percent premium to the purchase price at the time of Cromwell European REIT’s initial public offering (IPO) and an around 21 percent premium to the valuation at end-2020, the statement said.

“While CEREIT remains a long-term holder of real estate, the sale of the French asset is consistent with the manager’s proactive asset management strategy to improve the risk return quality of CEREIT’s portfolio,” the statement said.

The property is a single large warehouse building, constructed in 1995, with office accommodation; it is occupied by a major postal service and logistics company largely owned by the French government and it’s used for sorting parcels.

The deal is expected to be completed in the third quarter of this year, the REIT said.

Savills Advisory Services had valued the property at 4.8 million euros at end-2020 on an independent basis, the filing said.

Including the Parc de Popey property, Cromwell European REIT holds 108 properties valued at a total of around 2.31 billion euros, the filing said. The REIT’s mandate is to invest in European office, light industrial, logistics and retail properties, with the majority in Western Europe.

Cromwell REIT’s Singapore dollar units were trading unchanged at S$3.75 at 10:32 a.m. SGT Tuesday, while its euro-denominated units were flat at 2.35 euros.