Cromwell European REIT acquires three logistics assets across the UK and Netherlands

Euro coinsPhoto by Leslie Shaffer

Correction: An earlier version of this article incorrectly stated details of the Tilburg property’s purchase price and valuation, as well as the dates the acquisitions were completed.

Cromwell European REIT acquired three logistics assets, with one located in the U.K. and the other two in the Netherlands for a total consideration of 57.8 million euros, or around S$88.4 million, the REIT said in a filing to SGX Wednesday.

“The U.K. acquisition’s attractiveness is enhanced by its strategic location in a well-established manufacturing hub in North East England, which benefits from the highly-educated labour force and robust growth rates, leveraging the strong fundamentals of the U.K. economy,” the REIT said in the statement.

“The two Dutch acquisitions are CEREIT’s first in this market post-IPO, expanding its logistics portfolio in the Netherlands. This is a core market for Western Europe supply chains, given its strategic connectivity between its large ports and distribution network, which manifests in a record-low logistics vacancy rate of only c. 2.0 percent,” the REIT said.

The three properties have an aggregate net operating income yield of 5.6 percent and the purchase price is around 3.9 percent below the aggregate independent valuations, the REIT said.

The acquisitions will bring the light industrial/logistics segment to around 41 percent of Cromwell European REIT’s portfolio, a step toward the manager’s goal of a 50 percent weighting, the filing said.

The deals will be funded with part of the proceeds from the REIT’s recent S$100 million perpetual securities issuance, which provides funding in euro terms at 3.55 percent a year, the filing said.

The properties are fully let on long-term single leases to global lighting products supplier Thorn Lighting Ltd., e-retailer Kleertjes.com B.V. and fashion conglomerate Agile B.V., the filing said.

The deals were completed between 17 and 30 December, the REIT said.

Thorn U.K. property

The U.K. property, Thorn, is located in Spennymore, Durham, North East England, and has two buildings, including a light industrial facility with a two-storey office and amenity block, and a self-contained warehouse/factory unit, the filing said.

The 135,820 square meter site has a low coverage of 30 percent, offering a good redevelopment opportunity, the filing said.

The acquisition price for the Thorn property is 32.3 million British pounds, or around 38.4 million euros or S$58.7 million, the REIT said, adding the property’s valuation by Knight Frank was for 33.6 million pounds on 23 November.

‘s-Heerenberg property in the Netherlands

In the Netherlands, the ‘s-Heerenberg property is located on the Dutch-German border in Gelderland province, the filing said. The site has an area of 21,913 square meters, with a large-scale warehouse and ancillary office space, the REIT said.

The property is fully-let on a long-term lease to Kleertjes.com, a leading e-retailer of children apparel, which was recently acquired by Dutch e-commerce platform Wehkamp, the filing said.

The acquisition price for the ‘s-Heerenberg property is 8.4 million euros, or around S$12.9 million, compared with an independent valuation by CBRE for 8.8 million euros on 2 November, the filing said.

Tilburg property in the Netherlands

The Tilburg property, located in the Tilburg-Waalwijk area of the Netherlands, has a site area of 14,139 square meters and has a warehouse and small ancillary office, the filing said. The property has the highest efficiency band for energy, the REIT said.

“This region is one of the most important European logistics hubs, ranked number 1 logistics location in the Netherlands by the leading logistics experts of logistiek.nl,” Cromwell European REIT said, citing proximity to the A58 highway which links with roadways connecting Rotterdam, Antwerp, Amsterdam and Eindhoven areas and nearby three Trans-European Transport Network routes.

The Tilburg property is fully leased on a long-term basis to Agile, a shoe and fashion manufacturer and omnichannel retailer in the Netherlands, the REIT said.

The Tilburg property’s purchase price  is 11.3 million euros, or around S$17.3 million, compared with a CBRE independent valuation of 11.8 million euros, or around S$18.1 million on 3 November, the filing said.

Read more about the three properties.