Cromwell to take up rights and grow AUM

Cromwell has undertaken to subscribe in full for its pro-rata entitlement under the proposed rights issue announced by Cromwell European REIT (CEREIT) to the Singapore Exchange Securities Trading Limited (SGXST) on 30 October 2018.

Acquisition

CEREIT announced a rights issue to partially fund the acquisition of 23 assets in five European countries for a total of €384.4 million.

The proposed acquisition consists of 16 office assets in the Netherlands, Finland and Poland for a total purchase consideration of €312.5 million (Proposed Acquisition), along with the acquisition of seven office, logistics and retail assets in Italy and France for a total of €71.9 million.

Financing

The new assets will be partially financed through the rights issue, under which CEREIT is seeking to raise up to €224.1 million, with the remainder of the purchase consideration financed by debt.

The Proposed Acquisition and rights issue were approved at an Extraordinary General Meeting of CEREIT unitholders, held on 15 November 2018.

Through its wholly owned subsidiaries, Cromwell currently holds interests equivalent to 35.31% in CEREIT, and has undertaken to subscribe in full for its pro-rata entitlement, funding the take-up through cash reserves and other existing sources.

Increased resilience from enlarged size and diversification

Cromwell CEO Paul Weightman commented, “Cromwell is fully supportive of CEREIT, and the Manager, and is delighted to take up this entitlement. The additional investment is fully consistent with our stated ‘Invest to Manage’ strategy of growing our funds management business.”

“The transaction increases CEREIT’s total portfolio value from approximately €1.4 billion to €1.8 billion, enhancing the size, scale and diversification of the portfolio,” he noted.

Notes:
(1) Valuation as at 31 March 2018 for Existing Portfolio except Ivrea; 1 April 2018 for Ivrea; 27 September 2018 for New Properties; 30 September 2018 for Italian Properties; and 19 October 2018 for French Properties
(2) WALE as at 30 June 2018 for Existing Portfolio; 31 August 2018 for New Properties, French Properties, and Italian Properties
(3) Occupancy rate as at 30 June 2018 for Existing Portfolio; 31 August 2018 for New Properties excluding Willemsplein 2; and 1 September 2018 for Willemsplein 2
(4) Assumes Milano Piazza Affari is 100% leased in view of the rental guarantee