Cromwell European REIT provides update on portfolio impact of Russia’s invasion of Ukraine

Euro coinsPhoto by Leslie Shaffer

Cromwell European REIT said Monday that of its 50 tenant-customers in Poland, it has identified eight with some business exposure to Russia, with most still assessing the impact, if any, on their business. 

The REIT has one tenant-customer in Poland which is an importer of coal mined by a Russian company, but it only occupies around 400 square meters of space out of the portfolio’s around 1.8 million square meters, Cromwell European REIT said in a filing to SGX. 

“Accordingly, CEREIT has limited exposure to tenant-customers with business exposure to Russia,” the REIT said.

Companies globally have been assessing the impact of sanctions imposed on Russia after it invaded Ukraine in late February. See updates on Russia’s invasion of Ukraine.

The manager of Cromwell European REIT said it has identified no material issues from the recent sanctions list screenings, with no counterparties on any sanctions list. 

Most of the tenant-customers in Poland and Slovakia — which both border Russia — are multinational companies, including European banks, global pharmaceutical companies and technology companies, the REIT said.

While the war has boosted energy prices, around 95 percent of the REIT’s leases are “net,” meaning tenant-customers bear their own utility costs, the REIT said. 

Cromwell European REIT cited a potential concern from a pending worker shortage as Ukraine supplies much of Europe’s migrant workforce and many businesses in the Czech Republic and Slovakia employing Ukrainian citizens have reported labor issues as Ukrainian men are mobilized for military service. 

In addition, the REIT has offered some office space and car garages to aid agencies to use as staging stations for food and clothing relief, the filing said.

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