Cromwell European REIT acquires logistics asset in Italy for around 20M euro

Euro coinsPhoto by Leslie Shaffer

Cromwell European REIT has acquired a logistics asset in Italy, its third in the country, for 19.6 million euro, or around S$30.6 million, the REIT said in a filing to SGX Monday.

The acquisition price is at 6.7 percent below an independent valuation, and offers a 6.5 percent net operating income yield, the trust said, adding it would initially be funded via available cash reserves.

“This is a valuable off-market opportunity for CEREIT,” Simon Garing, the CEO of the REIT’s manager, said in the statement. “Cromwell’s on-the-ground transaction team has secured the centre at well below independent valuation, with relatively low risk characteristics.”

The asset is located in Greater Venice, Veneto, which is among Northern Italy’s wealthiest regions and a major manufacturing hub, the filing said. The light industrial/logistics warehouse is on an eight-year lease to Reckitt Benckiser Group, a fast-moving consumer goods (FMCG) company with brands including Dettol, Scholl and Strepsils, the filing said.

Garing said the property is a “significant” logistics center in Italy for Reckitt Benckiser, located adjacent to the company’s manufacturing plant and research and development center.

““This is CEREIT’s third light industrial/logistics asset in Italy, which further builds CEREIT’s light industrial / logistics scale in Italy accretively,” Garing said. “We also have under review an advanced pipeline of opportunities in Western Europe, including Germany, the Netherlands, Italy and the U.K., which if materialised, is set to bring CEREIT closer to the stated target of a 50 percent portfolio weighting to this sector, up from the current 40 percent.”

The property, on a site area of 47,787 square meters, has a warehouse and small office component.

CBRE independently valued the asset at 21 million euro, the filing said.