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August 6, 2026

Kilsyth Connect reaches practical completion

Kilsyth Connect has reached a significant milestone, with practical completion of the final office-warehouse buildings marking the completion of the redevelopment program at 40 Garden Street, Kilsyth. The project showcases the industrial development and asset enhancement expertise Cromwell has integrated into the business, supporting the transformation of underutilised assets into high-quality industrial facilities aligned with occupier demand. 

The redevelopment has successfully repositioned Kilsyth Connect as a modern prime-grade logistics estate and has already attracted strong occupier demand. Jenera has been secured for a purpose-built 10,000sqm advanced manufacturing facility, while AFL Global occupies the refurbished existing warehouse and office.

 

Project Phase 1

  • Partial demolition of existing warehouse to optimise site coverage and improve access, traffic flow and operational efficiency  
  • Reduction of the office footprint from approximately 3,200 sqm to 2,000 sqm, with a comprehensive upgrade to a modern prime-grade standard. 
  • Strategic repositioning of an underutilised industrial asset through a combination of refurbishment, redevelopment and new construction. 
  • Completed: July 2025 

 

Project Phase 2

  • Development of 12,000 sqm of new industrial warehouse space, further enhancing the site’s logistics capability. 
  • Delivery of high-specification industrial facilities designed to support modern manufacturing and logistics operations. 
  • Construction of two new warehouses, each incorporating integrated office accommodation. 
  • Additional upgrades included enhanced car parking, landscaped areas and expansive hardstand space to support operational efficiency and future growth. 
  • Delivered in collaboration with 2Consturct. 
  • Practical Completion: June 2026 

About Kilsyth Connect

Kilsyth Connect Logistics Park is a 37,138 sqm logistics estate located in Melbourne’s established outer-eastern industrial corridor. Positioned close to key transport infrastructure, including EastLink and Maroondah Highway, the estate provides efficient access to Melbourne’s major distribution networks, population centres and regional markets.

Its strategic location supports streamlined freight movements, reduced transit times and enhanced supply chain efficiency, making it an attractive destination for manufacturing, warehousing and logistics operators seeking a well-connected industrial facility.

 

Looking ahead

The completion of Kilsyth Connect further reinforces Cromwell’s focus on managing high-quality industrial assets in strategically located markets. With strong leasing interest and demand for well-connected logistics facilities continuing across Melbourne, the development is well positioned to support occupier growth while contributing to Cromwell’s long-term asset management capability.
 

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July 16, 2026

Stock in Focus – APAC Resources

Jordan Lipson, Portfolio Manager, Cromwell Phoenix Global Opportunities Fund

Cromwell Jordan Lipson Portfolio Manager

Gold Exposed Stocks – An Update

In the performance commentary section of the September 2025 quarterly report, we discussed the portfolio’s exposure to gold miners and gold-exposed securities, a theme that had grown into a meaningful part of the portfolio. Given the eventful period that has followed, an update is warranted.

As a reminder, the Fund seeks out securities trading at discounts to readily assessable net asset values (NAVs), or special situations offering strong risk-adjusted returns. Gold miners are unusually well suited to this approach. Unlike most businesses, the value of a gold miner’s primary output can be observed directly, in a deep and liquid spot and futures market, which makes its NAV genuinely assessable. Towards the end of 2024, the share prices of many gold miners were simply not reacting to a rising gold price. A clear gap opened up between the value of the underlying assets and the prices being asked for them, and we saw an opportunity.

Our exposure

We established a meaningful exposure in November 2024, to a basket of particularly attractively priced stocks. As the gold price climbed, we generally topped up. This may seem counterintuitive, buying more as the commodity became more expensive, but it followed directly from the leverage described previously. A higher gold price lifted the NAVs of these miners faster than the metal itself, while their share prices continued to lag. In many cases the discount to NAV widened rather than narrowed, and we added accordingly.

As those discounts eventually began to close, and as the gold price reached levels that we found somewhat uncomfortably high, we started to slowly decrease our exposure to the sector. With the benefit of hindsight, these sales were both too early and not significant enough.

 

Recent performance

Amid a volatile macroeconomic and geopolitical environment, the gold price retreated from its highs over the period. It fell approximately 12% during the quarter and now sits around 25% below its January 2026 peak. After a long period in which the gold price moved rapidly higher, the direction of travel reversed.

In this environment, gold stocks detracted from performance. It is worth keeping this in perspective. Despite the weakness of the period, these securities have been significant contributors to returns over the life of the Fund. Over the quarter, ASA Ltd (NYSE:ASA) was down 16.4%, Oceana Gold (TSX:OGC) fell 20.6% and Alkane Resources (TSX:ALK) was more resilient, off 3.0%. One holding, however, disappointed for reasons that went well beyond simple weakness in the sector.

APAC Resources

APAC Resources (SEHK:1104) is a holding company with major exposure to a variety of mining companies. Its key holdings are based in Australia and have been well known to Phoenix for a long time. We initiated a position at the very start of the Fund’s life, drawn by underlying assets we found attractive and by a very large discount to NAV, with that NAV predominantly made up of listed securities, and therefore readily assessable.

We also formed the view that the market’s perception of APAC, related to its poor governance, was overstated. Over time, we believed the company’s actions validated that view. There were numerous positive changes, including improved disclosures, the initiation of investor presentations, the publication of monthly NAVs, and a corporate restructure that could potentially have allowed more capital to be released from the vehicle. The underlying investments also performed extremely well, including a managed fund of mining securities that produced spectacular performance.

As the NAV grew and the discount closed, we realised much of our position. Those sales more than covered the original cost of the shares, and we still retained a position of around 2%. To that point, the investment had unfolded very much as we had hoped.

APAC then disappointed. During the June 2026 quarter the company announced a rights issue at roughly a 33% discount to the last traded share price and a massive discount of approximately 71% to the prevailing NAV. A deeply discounted rights issue of this kind transfers value from those who cannot, or choose not to, participate. While the rights issue would at least have allowed us to participate and so minimise our own dilution, it was clearly a poor reflection on APAC’s governance.

Subsequently, weakness in markets and in the gold price led the underwriters of the rights issue to terminate their contract, and the rights issue was cancelled. While the dilution will now no longer take place, the reputational damage has been done. APAC dropped around 44% over the quarter and closed the period trading at more than a 66% discount to its NAV. We retain a 1.7% position and will decide what to do with it as more information is disclosed.

“For all the frustration of its recent conduct, it is worth recording that the investment has been extremely successful over its life, delivering an internal rate of return of 37.2% across the five and a half years it has been held in the portfolio. “

Where to from here?

The remaining gold positions continue to look attractive at current gold prices, though the opportunity is no longer as extreme as it once was. Reflecting both our earlier trimming and the moves within the sector, total exposure to gold securities, including APAC, now sits at approximately 9.5% of the portfolio.

This exposure hurt over the period, and the episode with APAC was a genuine disappointment. Taking a step back, however, the theme has been a meaningful contributor to the Fund, both in absolute terms and relative to the benchmark over its life. As ever, we will keep a watchful eye on the sector and let valuation guide our positioning from here.

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May 25, 2026

20:20 Stock Stories: Sunland Group

SUCCESS STORY CASE STUDY

 

As Phoenix Funds marks its 20‑year anniversary, we are revisiting a selection of past investments that continue to offer relevant lessons for investors today. This case study on Sunland Group forms part of our 20:20 Stock Stories series — a retrospective look at listed businesses that illustrate enduring principles of long‑term investing. Sunland Group was an ASX‑listed property developer for much of its corporate life, and Phoenix initiated a position in the company in 2014, remaining invested until its delisting in 2023. While market cycles, sentiment and conditions have evolved over that period, the core themes highlighted by this investment — earnings volatility, management alignment and the importance of after‑tax returns — remain as pertinent today as they were at the time. It is these timeless insights that make the Sunland story worth revisiting and sharing with our investor community.

“Volatility creates opportunity for investors who are able to look through the peaks and troughs and focus on long‑term value.”
— Stuart Cartledge, Co‑founder and Managing Director, Phoenix Portfolios

The first key lesson for us:

Volatility of earnings creates opportunities for those able to look through the peaks and troughs.

Looking through the volatility

Sunland Group was established in 1983 by architect Dr Soheil Abedian as a Queensland based property development company and was responsible for many projects across the east coast of Australia, spanning both iconic towers such as Australia’s tallest building, Q1 on the Gold Coast and house and land projects in emerging suburbs.

Except for a failed offshore expansion, and the difficult period during the Global Financial Crisis, Sunland has been a highly profitable and well managed business. Its core “House and Land” business consistently delivered solid returns which is a highly valued attribute of any listed company.

The high-rise business created iconic towers that produced some large profits upon completion. However, by its very nature, this led to a volatile income stream – something that many share market investors are uncomfortable with.

The second key lesson for us:

An aligned management team is more likely to make sensible strategic long term decisions.

Alignment of interest

The founding Abedian family maintained a large stake in Sunland throughout its listed life, thereby maintaining a strong alignment of interest with minority shareholders. However, the share market did not value the company appropriately, and over the period from 2009 through to 2020, the stock traded at a significant discount to its book value. A low share price does however enable a financially astute management team to buy back their own stock, reduce the number of shares on issue, and increased the value per share of all remaining shares. Using a combination of retained profits and inventory selldowns, Sunland bought back and cancelled over 55% of its own shares. This is a low-risk way of adding value.

The combination of good capital allocation, an aligned management team and a compelling valuation was attractive to Phoenix and a position in the stock was initiated in August 2014. This position was ultimately held until the company delisted in October 2023.

The third key lesson for us:

The market does not fully value franking credits. After-tax returns can be materially enhanced by holding companies delivering abundant fully franked distributions.

Franking credits

The de-listing was not a bad news story!  Despite years of buying back stock at a discount, a strategic review was undertaken and announced to the market in October 2020 which essentially involved either completing projects, or selling them, and returning all capital to shareholders.  At the time of the announcement, the share price reflected around half of the capital value of the business.

However, given an extended period of profitability and a substantial franking credit balance, a significant portion of sales proceeds were delivered to shareholders as fully franked dividends.  For Australian superannuation investors and foundations, this form of distribution is extremely tax effective and therefore very important from an after-tax return perspective.

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May 25, 2026

Enhancing Asset Performance for the Future – Electrification at 700 Collins Street

While the transition to a lower-carbon economy is not linear, expectations for commercial real estate continue to shift toward stronger energy performance, electrification and asset resilience. At 700 Collins Street in Melbourne, Cromwell is undertaking a broader program of capital investment to enhance the building’s long-term performance, relevance and appeal to high quality occupiers. As part of this strategy, the building is being transitioned from gas-powered systems to advanced electric technologies, including reverse-cycle heat pumps and heat recovery chillers. The project places 700 Collins Street among a small number of Melbourne CBD high-rise office buildings undertaking electrification retrofits at this scale, and among even fewer doing so while the building remains occupied.

Benefits of electrification

The upgrade is intended to improve operational efficiency, lower carbon intensity and strengthen the asset’s long-term resilience, efficiency and competitiveness.

It is also expected to remove approximately 2.28 million megajoules of natural gas from annual consumption, reducing reliance on fossil fuels and lowering energy intensity. Over time, this positions the building to benefit from grid decarbonisation and greater integration of renewable energy, supporting improved long-term energy performance.

The upgrade reinforces 700 Collins Street’s existing 5.5 Star NABERS Energy rating while aiming to lift the building’s Renewable Energy Indicator (REI) from 75% to a targeted ~99% (with the diesel generator retained). In a market where energy performance is increasingly influencing tenant demand and capital allocation, assets with strong performance credentials are better placed to attract and retain high-quality occupiers.

Proposed performance outcomes

~2.28 million MJ of natural gas removed annually
5.5-Star NABERS energy rating maintained
Targeted ~99% Renewable Energy Indicator (REI) rating
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For tenants, the transition to high-efficiency electric systems enhances workplace quality through more consistent temperature control and improved indoor environmental conditions, while also supporting tenants’ own sustainability objectives – factors that are becoming increasingly important in leasing decisions.

The electrification program has been delivered through a structured, seven-stage pathway, ensuring careful consideration of building systems, infrastructure capacity, and technology selection. The works have also been sequenced to support continuity of building operations during delivery.

 

 

Electrification Pathway

Timeline illustrating the Electrification Project at 700 Collins Street

McKell Building, Sydney

This approach has already been demonstrated within the portfolio. At Rawson Place in Sydney, the Group completed a “Sydney-first” electrification upgrade of the McKell Building, converting a multi-storey CBD office asset from gas to an advanced electric heat-recovery system. As the first project of its kind at this scale, it improved energy efficiency while helping future-proof the asset.

READ MORE

From a portfolio perspective, initiatives like this are critical in future-proofing assets against regulatory change and evolving market expectations. As ESG considerations become more embedded in investment decisions, proactively upgraded buildings are better positioned to support tenant demand, maintain long-term asset relevance, enhance investment appeal and deliver resilient long-term returns.

Ultimately, the electrification of 700 Collins Street reflects an active approach to managing and enhancing assets in response to structural market trends, supporting long-term value creation for investors.

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April 28, 2026

Stock in Focus – Bollore SE

Jordan Lipson, Portfolio Manager, Cromwell Phoenix Global Opportunities Fund

Cromwell Jordan Lipson Portfolio Manager

The Bollore Galaxy – An Update

As many readers may be aware, the portfolio has long held an exposure to entities controlled by the Bollore Family. The portfolio’s largest holding is Compagnie de l’Odet (Odet), a French-listed holding company controlled by the Bollore’s. Past generations of Bollore’s were in the business of thin paper manufacturing for uses such as rolling tobacco. In the 1980’s Vincent Bollore was an investment banker. He saw that the old family business was struggling mightily and decided to acquire the distressed business and recapitalise it. Bollore needed to raise external capital to diversify the company’s business interests but wanted to maintain operational control. Like any good investment banker, Bollore achieved this through complex structuring.

 

The current organisational chart is presented below to demonstrate this complexity, but for the sake of this article there are two key entities, both listed in France. They are:

  • Compagnie de l’Odet (Odet)
  • Bollore SE

These two companies own meaningful stakes in each other, creating an “ownership loop”. This structure can make the group difficult to analyse at first glance and importantly obscures the true value of the underlying assets.

 

org chart

Simplicity hidden by complex structure

Once one picks through the complex structure, understanding the underlying assets owned by both Bollore SE and Odet is relatively simple.

Odet predominantly derives its value from its stake in Bollore SE, while Bollore SE owns:

  • 5.6 billion euros in net cash (mostly raised through the timely sale of its logistics business at the top of the cycle)
  • An 18.4% stake in Amsterdam-listed Universal Music Group (UMG), the world’s largest music publisher
  • Smaller media and other investments (Including Vivendi)

 

Some action towards discount closure

At period end, valuing UMG at its prevailing share price, Odet’s net asset value is more than 280% above its share price (not a typo!). As such, nirvana for Odet’s external investors has always been the prospect of simplification of the corporate structure and perhaps assets being distributed, so that the discount is captured (ignoring any tax complexities). The actions of Vincent Bollore have always been unpredictable. To date, steps towards simplification have been erratic and incremental, however the direction of travel has broadly been positive. Bollore SE and Odet released their annual results during the period. Given the simple nature of the underlying assets, the results held very few surprises. The one major surprise was the announcement that Bollore SE would pay a special dividend of 1.50 euros per share, which represented more than one third of Bollore SE’s share price at the time of announcement. Furthermore, Odet announced that it would pay out two thirds of the dividend it received to its shareholders.

A special dividend is particularly important to holding companies trading at discounts to their NAV. When a holding company trades at a discount, investors are essentially buying $1.00 of underlying assets for a lower price, such as $0.50. A special dividend unlocks this “trapped” value because every dollar distributed is paid out at 100% of its worth, allowing shareholders to realize the full value of the assets regardless of the stock’s discounted market price. Odet’s share price rallied on the dividend news, but after one ascribes full value to thespecial dividend payment, the discount to NAV has actually widened.

In essence, the vast majority of Odet’s value is driven by cash and its indirect holding in UMG.

“At period end, valuing UMG at its prevailing share price, Odet’s net asset value is more than 280% above its share price (not a typo!)”

The UMG conundrum

Music has proven to have universal appeal (excuse the pun) across all ages and regions. UMG is the world’s largest music publishing business, having represented 9 of the top 10 artists globally across each of the past three years, including Taylor Swift and Lady Gaga. For readers of a different generation, UMG also owns timeless assets such as rights over The Beatles back catalogue. UMG can be thought of as a toll booth on music consumption.

Since its separate listing in 2021, UMG has typically traded at a premium valuation, given the high-quality nature of its business. Very recently, concern has grown that artificial intelligence (AI) may threaten the quality of this business, both by enabling solo artists to self-publish and by allowing AI to create the music itself. This threat has caused UMG’s share price to drop from a high of almost 29 EUR per share to lows of approximately 15.50 EUR per share. According to S&P CapitalIQ consensus estimates, UMG trades at a 2026 Price to Earnings ratio less than of 16x, which compares to the S&P 500’s price to earnings ratio of just under 26x.

The quality of the music business has been tested before. Physical sales of music, mostly CDs, peaked in 1999. The proliferation of music piracy meant that it took until 2021 for music sales to reach that absolute level again (see below). Adjusted for inflation, music sales are still below that 1999 level.

music-report

Streaming services, and their global appeal completely changed the game for musicians and publishers. UMG’s more bullish investors would say that these streaming services have pricing power beyond what they currently charge and are also supported by the tailwind of a growing global middle class that can afford these services. If this is true it would likely mean robust earnings growth for the company for many years to come. UMG’s detractors would say AI developments will take power away from music publishers and extreme believers in AI would say it takes relevance away from the skill and creativity of musicians and songwriters.

Should concerns turn out to be overblown and UMG once again trades at its previous highs, Odet’s NAV would expand to a ~370% premium to its current share price! Alternatively, even assigning zero value to UMG leaves Odet’s NAV at a ~65% premium to the prevailing share price, showing the high margin of safety inherent in this investment. While there are legitimate debates about the future of music, we believe the long-term appeal of professionally produced content remains strong. However, an investment in Odet could still be an excellent investment, even if that belief proves to be optimistic.

 

The Longer Game

The ultimate result for investors would be a return to glory for UMG, alongside a return of capital from Odet. In recent times, the number of boxes in the organisational chart above has reduced as some simplification has occurred. The Bollore Family has also tried to remove more entities from that chart, yet faced resistance from minority shareholders. Odet itself has bought more and more Bollore shares. This activity (which effectively amounts to a buyback) has accelerated since the entities released their full year results. Most importantly, the recently announced special dividend shows a willingness to return capital to external shareholders and also moves cash around the different entities within the Bollore Galaxy. This may be tactical and act as a prelude to Vincent Bollore’s next move. Possibilities are the basis of much speculation amongst shareholders, but only the Bollore’s know the true endgame. In the short term the distribution allows shareholders to receive a meaningful portion of the NAV back at 100 cents on the dollar. Not a bad outcome for now.

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April 28, 2026

Cromwell’s continues to be part of the NABERS Sustainable Portfolios Index 2026

Cromwell has been recognised in the NABERS Sustainable Portfolios Index (SPI) 2026, reflecting the strength of our portfolio‑wide approach to sustainability and asset performance. 

Cromwell Diversified Property Trust (DPT) ranked 3rd in the 2026 Office Energy SPI for our investment portfolio. Across nine properties (222,309 sqm), the Renewable Energy Indicator (REI) increased from 21% to 57%, driven by the integration of onsite solar energy, the continued purchase of 100% green power where Cromwell purchases electricity at operationally controlled assets since Jan 2024, and electrification initiatives at HQ North and the McKell Building. 

Additionally, Cromwell Direct Property Fund (DPF), managed by Cromwell Funds Management, ranked 4th in the index. Across seven assets (63,153 sqm), the Renewable Energy Indicator (REI) increased from 36% to 82%, driven by the integration of onsite solar energy into the portfolio. This increase is further supported by the continued purchase of 100% green power for the majority of Cromwell’s operationally controlled assets since 2024, with full 100% green power procurement achieved by January 2025. 

The NABERS SPI benchmarks the performance of building portfolios like ours across energy and water efficiency, waste management, indoor environment quality and carbon neutrality, spanning Australia’s office, shopping centre and hotel sectors. 

We are proud to be part of a growing community of leaders who are setting the standard for sustainable practices in the built environment.  

See the highlights of the NABERS SPI 2026 here or the full results here.

 

NABERS-SPI

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February 26, 2026

Cromwell announces HY26 results

Cromwell Property Group (ASX:CMW) (Cromwell or the Group) announces its financial results for the half year ended 31 December 2025.

Cromwell Chief Executive Officer, Jonathan Callaghan, said: “This has been a successful half-year for Cromwell, with disciplined execution and solid operational performance across the platform.” Key highlights for the six months to 31 December 2025 include accelerated growth, strengthened financial performance, and continued progress across strategic initiatives.

View HY26 Results Presentation View HY26 Results Announcement Listen to HY26 Results

Key Highlights

  • Growth accelerated with the acquisition of an industrial management platform and a 19.9% stake in a $472 million Australian industrial portfolio (the Cromwell Industrial Partnership (‘CIP’)), establishing the foundation for a core pillar of the Group’s growth strategy.
  • Group AUM rose 13.2% to $5.0 billion, driven by the industrial platform acquisition and stronger portfolio valuations.
  • Operating performance strengthened, with operating profit up 1.5% for the six months ended 31 December 2025.
  • The Group’s strong balance sheet provides financial flexibility for growth, with gearing at 30.2%1, significant liquidity of $418 million, and 71%1 of debt hedged, all as at 31 December 2025.
  • Investment Portfolio valuations increased by 3.6%1, driven by a successful leasing strategy and high portfolio occupancy of 97.2%1.
  • Investment management pipeline continues to build momentum with the Barton1 development progressing on schedule and within budget.
  • Distribution guidance of 3.0 cps is reaffirmed for FY26.
highlighted projects

We continue to build momentum as we progress our strategy and position the Group to deliver sustainable long-term growth.
Jonathan Callaghan, Cromwell Chief Executive Officer

Financial performance

Cromwell reported an increase of 1.5% in operating profit to $55.9 million, supported by the continued strong performance of the Investment Portfolio, which recorded valuation gains of $72.0 million during the period. The Group reported funds from operations (FFO) of $55.3 million, equivalent to 2.11 cents per security, reflecting a payout ratio of 71.0%.

Net Tangible Assets (NTA) increased to $0.58 per security, up from $0.56 per security at 30 June 2025. NTA remains above the current trading price, highlighting the upside potential relative to the Group’s underlying asset base.

Gearing remains low at 30.2%1, providing substantial balance sheet capacity and maintaining significant headroom against debt covenant limits. Cromwell’s $418.0 million of liquidity supports continued flexibility for disciplined capital deployment into growth initiatives.

Investment portfolio performance

Cromwell’s Investment Portfolio delivered a strong performance over the six months to 31 December 2025, with valuations up 3.6% since FY25 to $2.1 billion1, driven by resilient asset fundamentals and improving market conditions. The uplift reflects both sustained leasing activity across key assets and continued stabilisation in valuation metrics as capital markets regain confidence.

Occupancy remains high at 97.2%1, supported by leasing of more than 23,000 square metres during the period. Material uplift was seen at Cromwell’s asset at 400 George Street, Brisbane, where key leases have been extended to 2030 following the exercise of a three‑year lease option by QLD State Government.​

Positive market momentum is expected to continue through the remainder of the financial year, supported by firming demand for high‑quality real estate and constrained supply of office space. Together, these factors position the portfolio well for ongoing stable earnings and enhanced returns for investors as the Group continues its growth trajectory.

Strategic growth initiatives

Cromwell advanced its growth strategy during the half through three key initiatives.

external industrial building
Expansion into Australian industrial real estate

Cromwell completed Phase 1 of its transaction with Straits Real Estate Pte Ltd (SRE), acquiring a 19.9% interest in SRE’s industrial portfolio and its management platform, Terre Property Partners (TPP). TPP adds $567 million in AUM, deep industrial expertise and a proven team, strengthening Cromwell’s on-the-ground capability and supporting further growth in investment management.

Phase 2, launching shortly, will bring additional capital partners to the portfolio as it grows through acquisition and development. The existing seven-asset, $472 million logistics portfolio (cap rate 6.1%) provides scale and diversification, with assets in key logistics hubs of Bayswater (VIC) and Salisbury South and Port Adelaide (SA).
Cromwell Funds Management 100 Creek Street Brisbane building
New wholesale fund launched

Cromwell launched the Cromwell Creek Street Investment Trust, with a ~$102 million capital raise underway to acquire 100 Creek Street, a 24-level, ~20,000 sqm Brisbane CBD tower. The asset is 94.3% occupied with a diversified tenant base.

The Fund targets an 8.0% p.a. monthly distribution yield, 100% tax-deferred distributions for the first two years, and a 15% target equity IRR over five years. Independent research has rated the Fund “Recommended.”

Read more about the Fund here.

Read the Core Research Report here.
New landmark development, Barton, ACT
Barton1 development progressing to plan

Cromwell’s Barton1 development is forecast to complete on schedule and within budget for mid-2027 completion. The 19,800 sqm office building is fully pre-leased to a Commonwealth Government tenant on a 15-year lease, plus a 5-year option, providing long-term income security. Given the challenging development environment, the fixed-price contract, secured pre-lease, and strong tenant covenant position Barton1 as a rare and compelling opportunity.

Read announcement here.

Investment Management update

Growth in Cromwell’s Investment Management business was driven by the acquisition of TPP and the 19.9% interest in CIP during the period, and the Group now manages $2.8 billion across Australia and New Zealand.

The Cromwell Direct Property Fund (DPF) holds seven2 assets valued at $470.3 million, with the five direct assets valued at $396.5 million, representing a 1.3% valuation increase since at 30 June 2025. Portfolio occupancy remains high and unchanged at 96.4%, with the portfolio’s cap rate tightening to 7.7%.

DPF has commenced the wind up process following the Periodic Liquidity event voted for by investors in late 2025. As part of this process, the sale of 545 Queen Street settled on 19 December 2025, delivering $77 million in net proceeds after selling costs.

 

Outlook

The Group has made strong initial progress in implementing its strategy to grow third‑party funds under management, broaden our capability set and investor base, and bring to market new products in the office and industrial sectors, with continued work underway in the retail sector, which remains a key focus.

Capital deployment will continue to support growth through both organic initiatives and targeted inorganic opportunities, with an emphasis on strategic, value‑add acquisitions in Australia’s core sectors in partnership with new, aligned capital partners.

Cromwell will maintain strong occupancy across its Investment Portfolio to support income during the current growth phase, underpinned by targeted leasing campaigns, spec‑suite delivery, and capital works designed to enhance occupancy, grow WALE and rental income.

The Group continues to monitor its capital management position by preserving gearing headroom to enable opportunistic transactions, proactively managing refinancing to protect interest costs and liquidity, and maintaining disciplined capital allocation.

The Group reaffirms its expectation of an annual distribution of 3.0 cents per security for the 2026 financial year.

 

 

 

Footnotes:

  1. Excluding 475 Victoria Ave, Chatswood, which is classified as held for sale and includes Barton1, currently under development.
  2. DPF assets are comprised of 5 direct assets and 2 assets in underlying unit trusts.

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January 22, 2026

Stock in Focus – Young & Co.’s Brewery PLC

Jordan Lipson, Portfolio Manager, Cromwell Phoenix Global Opportunities Fund

Cromwell Jordan Lipson Portfolio Manager

Old business in a modern world

Young & Co.’s Brewery PLC (Young’s) has been an investment within the Cromwell Phoenix Global Opportunities Fund since its inception six years ago. Its history goes back far longer than that, with connections to its previously owned brewery dating back to at least the 1500s, but likely longer than that. Today Young’s owns and operates 288 predominantly freehold pubs across the United Kingdom. A combination of cyclical and structural factors have led to extreme pessimism in the UK pub sector, however Young’s is well run, financially sound and trades at a meaningful discount to readily assessable value. Furthermore, the portfolio accesses this opportunity at a further discount, given its unique shareholding structure. This makes Young’s an attractive investment, squarely within the portfolio’s investment universe.

Looking back

Records of the Ram Brewery, based in Wandsworth in Southwest London, date back to 1581, when it was run by Humphrey Langridge. After changing hands and being passed down generations, the brewery was sold to Charles Allen Young and Anthony Bainbridge in 1831, who had supplied brewing equipment to the previous owners of the brewery. It was then inherited by Charles Florance Young in the late 1880’s, at which point Young & Co.’s Brewery Ltd was established. Not long after, in 1898, the business was listed on the London Stock Exchange. The company’s history of pub ownership also goes back centuries, with a Young family partnership acquiring 88 pubs alongside the brewery. This was an early form of what is now known as “vertical integration”, with the pub’s major focus being the sale of beer made by the Ram Brewery.

Young’s and the Young family were titans of the UK beer scene. Those who grew up in London in the 1900s would probably have ordered many a pint of Young’s Original, or Young’s Special. Young’s was run by John Young for much of the late 1900s, until he retired as Chairman in 1999. The brewery was known to be a family business, that deeply cared about its staff, with many generations of family members working at the Wandsworth site. Historically, it is fair to say occupational health and safety standards were traded for a positive work environment, with Ram being the last “wet brewery”, with staff able to have a healthy sampling of the product at work until the 1970s. Ram was the longest continually running brewery in the UK until 2006 when it was decided that it would close its doors. The now valuable property was to be sold off for much needed residential housing. Up until it closed, beer was still delivered by horse to pubs serving Young’s within a two mile radius of the brewery. The iconic site hosted an animal paddock and was visited by both the Queen and the Queen’s mother. John Young passed away in 2006 not long after the decision to close the brewery was finalised. The last batch of beer produced at the site was served at his funeral.

“In this tough environment, Young’s grew like-for-like sales by 5.7% in the previous financial year and has grown that figure by more than inflation for over a decade.”

Moving on

At the time the brewery closed, it was likely losing money, or making a minimal return on capital and the core of the business was the ownership of the pubs. The Young family continue to be meaningful shareholders to this day, with Torquil Sligo-Young previously working in the business, and now a member of its board of directors. Whilst now a professional pub operator, this connection has arguably been a key to business success. It has facilitated a focus on high quality operations, investing in the pubs it owns and maintaining a conservative financial structure. This contrasts with some of the large UK pub owners, without controlling shareholders, who have used immense financial leverage to grow their businesses and have hurt non-associated shareholders. This financial strength shone through across the covid-affected period, allowing the company to keep going with only the addition of modest debt, well below its full debt capacity.

That is not to say that Young’s won’t buy pubs. They have actively rotated and grown their portfolio of pubs, achieving solid returns on capital. Most recently, Young’s completed the acquisition of fellow listed pub owner, The City Pub Group, which added 51 pubs to the portfolio, predominantly in London and the South of the UK. This was a win-win transaction, with City Pub’s small size leading it to be undervalued by the market. Young’s as a larger organisation can achieve greater returns from the portfolio with easy wins, such as combining two sets of listing and board costs into one and achieving discounts on product sourcing. As a well-capitalised organisation, Young’s will likely be able to invest more capital into the pubs making them more attractive to patrons. The combination has progressed well, with staff onboarded and profit margins for the pubs beginning to show expansion.

More recently, as sentiment around UK pubs has soured, so too has the price of Young’s shares, particularly the voting A shares. The management team and board have shown capital allocation discipline, undertaking a buyback at discounted prices. This option is only available to the company because of its financial discipline.

State of the market

As previously mentioned, sentiment around UK pubs is poor. Firstly, they had to see off the depths of pandemic closures. Many large pub companies came away from that experience with very stretched balance sheets. Subsequently, pubs have had to face rising cost of goods sold, affected by food inflation, electricity cost hikes, additional taxes on alcohol and this year they will face a meaningful increase in the UK National Insurance rate. These factors have combined with generally lower rates of alcohol consumption in the Western World. The number of pubs in the UK has dwindled from more than 60,000 in the early 2000s to approximately 40,000 today. Much like the Ram Brewery, part of this can be ascribed to higher and better use of the properties. The UK still maintains a higher number of pubs per capita than Australia, but pales in comparison to our Irish friends, who frequent the same number of pubs as Australians, despite having approximately one fifth of the population.

Despite the challenging operating environment, Young’s has performed admirably. Thankfully, there are many listed UK pub companies, with long histories of financial information allowing us to form a clear picture of the industry over time. Listed players have meaningfully outperformed the broader pub market over time, as independent operators have struggled to compete against the scale and professionalism of larger operators. Amongst listed peers, Young’s has maintained either the best or second-best performance depending on the time of measurement. The only other company that compares is JD Weatherspoon, who not surprisingly has a controlling and aligned major shareholder who cares deeply about the company. JD Weatherspoon was a previous successful investment for the portfolio. Today Young’s is however best placed, with London outperforming the rest of the UK and its more upscale pubs better placed for today’s market environment than Weatherspoon’s highly affordable options.1

In this tough environment, Young’s grew like-for-like sales by 5.7% in the previous financial year and has grown that figure by more than inflation for over a decade. This has been aided by premiumisation, with sales of cocktails far outpacing the growth in sales of beer and wine. Young’s business model is also somewhat decentralised, with a lot of the key decisions about pubs handled at the pub manager level and support provided from central management. Supporting this, 85% of Young’s general managers have been internally developed, with many in upper management beginning their careers pulling pints.

 

 

 

The value

Given the quality of management and the pubs owned, one may expect Young’s to trade at a premium valuation. That is not the case today. Young’s values its property at market value on its balance sheet, allowing for a simple calculation of its net asset value (NAV). As at the end of December 2025, the company’s Voting A shares traded at more than a 40% discount to this value. The assumptions used in these valuations are also likely to be conservative and significantly undervalue the freehold estate when compared to similar Australian properties, which can trade at capitalisation rates below 5.0%.

But wait there’s more! In 2005, Young’s simplified its capital structure to maintain two classes of shares (down from three) and moved to the Alternative Investment Market (AIM) from the main listing segment of the London Stock Exchange. Young’s lists both its voting A shares and its non-voting shares (under code AIM:YNGN). Its non-voting shares have traded at a meaningful discount to the voting shares for a long time. Over the past 8 years the discount has averaged 33% and was as wide as 50% in 2021. This discount has somewhat closed, and ended the period just over 20%, aided by the fact the aforementioned share buyback is taking place solely amongst the non-voting shares. The portfolio has only ever invested in the non-voting shares, which has cushioned some of the pain of Young’s weaker share price performance, as the discount has closed.2 We are more than happy to relinquish this voting power as management, the board and the Young family have done a very good job in charge of the business for a long time. We would only ever vote with management and see no need in telling some of the best operators in the sector how to do their job. The discount we receive for giving up these voting rights is also extremely attractive. At period end the non-voting shares traded at a 54% discount to the readily assessable NAV of Young’s. At that valuation we are happy to keep a watchful eye on the cyclical factors affecting the industry and hopefully enjoy the returns created by a best in class management team with a well-positioned portfolio.

 

Footnotes

  1. A “small breakfast” of a fried egg, bacon, sausage, beans and a hash brown can cost as little as £2.99 at Weatherspoons!
  2. The Young’s non-voting shares ended the period at a small discount to the portfolio’s cost base.

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November 27, 2025

Stock in Focus – Alkane Resources

Cromwell Jordan Lipson Portfolio ManagerJordan Lipson, Portfolio Manager, Cromwell Phoenix Global Opportunities Fund

Sitting on a Gold Mine

The Cromwell Phoenix Global Opportunity Fund’s mandate is simple but wide: to seek out attractive opportunities across the small-cap universe where securities trade at discounts to readily assessable net asset values (NAVs), or where special situations create strong risk-adjusted return potential. This allows us to go wherever opportunities may present. Towards the end of 2024 an opportunity presented to invest in gold miners. A fast-rising gold price and a muted response from gold miners led to a compelling investment opportunity. These purchases, along with a timely addition in May this year, meaningfully contributed to returns over the period.

Gold vs Gold Miners

When the price of gold goes up, gold miners benefit more than you may inherently think. This is because a mine is leveraged to the price of gold in a way simply owning gold bars isn’t. Despite the immense challenge of running a mining operation, the underlying economics are relatively simple. Costs include the energy, people, infrastructure and equipment it takes to get gold ore out of the ground (and often process it) and revenue is the amount purchasers pay for the gold. For the most part, the cost of extracting the gold does not change when the gold price does, while revenue is directly linked to the gold price. A simple example highlights just how much leverage a gold miner might have to the price of the shiny metal. Let’s say it costs $1,500 to extract an ounce of gold, and the price of gold is $2,000 per ounce. The miner will clearly make $500 for every ounce of gold it mines and sells. Now let’s say the price of gold increases by 50% to $3,000 per ounce. It still costs $1,500 per ounce to get the gold out of the ground1 but now my pretax profit has increased by 3 times to $1,500 per ounce ($3,000 – $1,500) despite the gold price only increasing 50% (Figure 1).

This example is dramatically oversimplified and misses much nuance, but what naturally follows, is that when the gold price increases, the price of a gold miner should go up even more (all else equal). In the example in Figure 1, a 50% increase in the gold price has led to the mine becoming 200% more profitable. Figure 2 shows what actually happened in 2023 and 2024. Rebasing values to 100 as at the start of 2023, it shows returns for junior gold miners compared with returns of the gold price.

Figure 1

 

Figure 2

“Across 2023 and 2024 the price of gold rose 43% (in USD), whereas gold miners only rose ~17%.”

As can be seen above, across 2023 and 2024 the price of gold rose 43% (in USD), whereas gold miners only rose ~17%. This is the opposite of what would be expected to happen. Some of this relates to a more challenged cost environment, but that alone can’t explain this outcome. What happened next is shown in Figure 3. It expands on from Figure 2, beginning in 2023 and continuing until the end of the September 2025 quarter.

As can be seen, the environment for gold has been extremely conducive since the end of 2024. The gold price continued to rise, and gold miners have finally seen the upside leverage to the gold price reflected in their own share prices.

Figure 3

What happened?

Analysing exactly why gold miners underperformed the rally in the gold price initially is an imprecise activity, however observations can be made. It is worth noting that brokers provide widely available net asset values (NAVs) for gold miners. Often, they provide two; one using their own assumed gold price, and another assuming the current (or spot) gold price remains stable. At the end of 2024, NAVs using spot prices showed many gold miners trading at a price to NAV of less than 0.5. Official published NAVs, using broker predictions of future gold price, were much lower. This was a result of “expectations” of a lower future gold price. In reality, brokers are hesitant to quickly move assumptions when information changes. This would require constant republishing and changes of opinion, none of which is practical or in their interest. This is not a criticism, as their job is to provide analysis, information and generate trades, not necessarily to be a hands on investor. In the case of gold however, there is a liquid spot and futures market2, which allows investors to observe the value of gold today and of the price at which it can be hedged in the future. This gold price can simply be utilised in a model to derive a valuation. The benefit of using a market-based gold price, relative to a single market participant’s expectation, is the “skin in the game”. The World Gold Council reports that over US$200 billion of gold is traded per day, and each buyer and seller is incentivised to maximise their own profit.

At the end of 2024, spot and futures prices were meaningfully higher than many broker estimates. To be fair, they were probably higher than many of the estimates in other investors’ financial models, however these models are not publicly available. With the gold price sustained at higher levels, the outcome was predictable. Brokers (and probably other investors) moved their gold price assumptions higher thereby increasing valuations. As the gold price continued to increase, this cycle continued, with assumptions and valuations consistently stuck in the past. The recent rally in gold miners reflects a catch up in those assumptions.

 

 

 

Alkane Resources

Alkane Resources has long been listed on the Australian Stock Exchange and has been a holding of the domestically focused Cromwell Phoenix Opportunities Fund for many years. In April 2025, Alkane announced a transformational merger of equals proposal with Canadian-listed Mandalay Resources. The transaction was structured to have Alkane acquire Mandalay Resources and for shareholders of Alkane to end up owning 45% of the combined business with Mandalay shareholders owning the remaining 55%. This provided an opportunity for this portfolio to purchase a position in Mandalay, which was trading at a small discount to the merger price implied by Alkane’s Australian share price, and more importantly a meaningful discount to the merged company’s NAV and our assessment of valuation. The merger was highly likely to close as the transaction was recommended by both sets of board members and supported by major shareholders.

The merger represented an attractive proposition for both sets of shareholders. Mandalay had struggled for market relevance, as a closely held stock, listed in Canada, with assets in Australia and Sweden. For Alkane, the merger transforms the business from a single-mine producer into a multi-mine company, reducing asset-specific risk and improving production and earnings resilience. Furthermore, Alkane’s operating results have been burdened by legacy hedging contracts, whereas Mandalay is unhedged, providing the combined group with more direct exposure to movements in the gold price. The increased scale of the combined company has facilitated greater investor interest and attracted meaningful passive investment inflows. Alkane was added to the ASX 300 Index in late September and also received an upweighting in the US$8 billion VanEck Junior Gold Miners ETF (GDXJ), reflecting its enhanced market capitalisation and improved free float. Furthermore, the combined company is being run by long-time Alkane CEO Nic Earner, for whom we have a great deal of respect.

The merger was approved and successfully closed in early August. The portfolio’s holding in Mandalay until August marginally detracted value relative to indices, however since August, the holding (in what is now the merged Alkane Resources) has returned almost 66% in CAD. The position has been trimmed as it has risen, however remains 3.0% of portfolio assets at period end.

 

Current positioning

With the recent rally in the price of gold miners, it is reasonable to wonder if they still represent an attractive investment opportunity. The answer in our view is broadly yes. The same biases that led to undervaluation in the past are still prevalent today as the gold price climbs higher. The portfolio has however been a net seller of these stocks for risk management reasons, as we do not wish to have too large an exposure to this one specific theme. The price to (spot) NAV of many gold stocks remains near 0.5, despite the strong performance. If current gold pricing holds, gold miners should produce strong profitability, cash flow and returns in the future.

As at period end, direct exposure to gold miners represents approximately 9.5% of the portfolio.

 

 

Footnotes

  1. In reality, a strong gold market would lead to tighter labour market conditions and other factors that would increase the cost of mining, but this is small in comparison to the increase in profitability. There may also be a royalty associated the gold mined, which is a variable cost based on the gold price.
  2. This is merely a market where a participant agrees to buy or sell a commodity at an agreed price at a point in the future. It can be used to speculate (or hedge) on the future price of the commodity. All things equal, a futures price should be the spot price adjusted for the time value of money and storage costs.

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November 27, 2025

CEO Update

Jonathan Callaghan, Chief Executive Officer, Cromwell Property Group

 

We recently held our Annual General Meeting, where we reflected on a transformative year for Cromwell. FY25 marked a turning point as we simplified our business, strengthened our balance sheet, and laid the foundation for sustainable growth. I am pleased to share some of the key achievements and strategic initiatives that position us for an exciting future.

 

Operational highlights

Our Investment Portfolio continues to perform exceptionally well. Occupancy sits at a sector-leading 97.6%, and our weighted average lease expiry remains strong at 5.0 years. During the year, we leased over 51,000 square metres, including a landmark 15-year pre-lease to the Commonwealth Government at our Barton, ACT development—a future flagship asset for our Investment Management business.

 

Financial performance

We delivered an operating profit of $108.6 million and funds from operations of $105.7 million, equating to 4.0 cents per security. While these figures reflect the impact of our European exit and prior-year one-off fees, they underscore the resilience of our Australian earnings base. Importantly, we reduced Group gearing from 38.9% to 28.2% through $1.6 billion in non-core asset sales, and we now have $504 million in deployable liquidity. This strong position enables us to provide distribution guidance for FY26 of 3.0 cents per security—the first time in several years—supported by secure income streams, 69% of which come from Government and other blue-chip tenants.

Strategic direction

Our strategy is clear: transition toward a capital-light investment management model while maintaining a high-performing portfolio. Recent initiatives demonstrate this approach in action.

Landmark Barton, ACT development

We have commenced development of a fully electric, 6-star rated office building in Barton, ACT, for a Commonwealth Government tenant. This project, due for completion in 2027, will be a prime opportunity to attract capital partners when the time is right.

Growth in AUM through strategic industrial portfolio acquisition

We have entered into a conditional agreement to acquire a 19.9% interest in Straits Real Estate’s Australian Industrial portfolio and its management platform, Terre Property Partners. The portfolio comprises seven high-quality industrial assets with total value of $470 million, located in key logistics hubs across Victoria and South Australia.

The acquisition will cost $47.6 million for the portfolio stake and $2 million for the Terre Property Partners platform. It will be funded from existing group liquidity and is expected to deliver stable, recurring income to the Group through distributions from our partial portfolio ownership and fund management fees. This transaction will grow assets under management by approximately $540 million, which includes two single assets also currently under Terre Property Partners’ management.

This strategic acquisition aligns well with Cromwell’s existing portfolio, enhancing asset and income diversification while strengthening our position through new capital partnerships.

Looking ahead

Cromwell will continue to expand its Funds Management platform through organic growth, scaling existing products, and strategic acquisitions. We will leverage our strong capital position and improving market conditions to accelerate growth, drive recurring fee income, and deliver long-term value for our investors.

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