Active Portfolio Management
Cromwell maintains an active portfolio assessment and management strategy which ensures all opportunities are taken to improve overall performance through not only acquisition of assets, but also the timely divestment of assets.
Cromwell’s current portfolio is weighted towards the commercial office sector and to Victoria geographically. This represents Cromwell’s strategy of investment in markets where we see growth potential. The Group’s current acquisition focus has turned to the NSW commercial office market, where we consider the next growth opportunities to begin emerging.
During the 2007 financial year, Cromwell has taken advantage of strong markets to dispose of some non-core assets in less preferred markets.
Case Study – 475 Victoria Avenue
475 Victoria Avenue, a twin office tower complex in Chatswood, Sydney was purchased for the Cromwell Diversified Property Trust in March 2006 for $102.6 million. At the time of purchase the towers were only 72% leased. By 30 June 2007 occupancy had been increased to 98%, with quality tenants such as Leighton Contractors, Coffey International and Evans & Peck taking space. The property’s value has also increased as a result of the improved occupancy, with an independent valuation as at 31 December 2006 valuing it at $125.5 million.
What led to the success with this property?
Firstly a top class due diligence process that was able to identify the property as having all the essential fundamentals for success. These opportunities were able to be realised through Cromwell’s internal property management team adding significant value to the building’s repositioning.
How was this achieved?
Upon settlement of the property, Cromwell took over the day-to-day management of the property, and made the decision to immediately refurbish all of the remaining vacant floors to the standard the market required, which improved their marketability considerably. An aggressive marketing campaign then began, resulting in the property’s vacancy decreasing to just 2 per cent at 30 June 2007 in a challenging leasing market.
The full internalised property management team were involved in the process from tenant liaison and facilities management to project management and leasing – with a great result for Cromwell Group.