Cromwell EREIT Management Pte. Ltd., the manager (the “Manager”) of Cromwell European Real Estate Investment Trust (“Cromwell European REIT” or “CEREIT”), is pleased to announce that CEREIT has, on 9 December 2022, completed the divestment of a logistics park in Bois du Tambour, France (the “French Divestment”).
1. Introduction
SINGAPORE – The Manager’s Chief Executive Officer Mr. Simon Garing said, “I am pleased to announce the completion of this €11.01 million (S$15.7 million) logistics park divestment in Bois du Tambour, 355 kilometres from Paris. The sale price reflects a 55% premium to the latest valuation2 . We announced the divestment back in September and completed the transaction within four months. Our local Cromwell asset management team have added substantial value considering CEREIT’s purchase price was only €2.0 million in 2017.
Since the beginning of 2022 CEREIT has executed approximately €41 million in planned divestments of non-core assets at a blended 20% premium to the latest valuations. Other than the French divestment, this also includes two light industrial assets in Germany, one large office asset in Finland and a logistics unit in Italy. All these assets were earmarked for sale through a rigorous portfolio optimisation process that underlines CEREIT’s NAV resilience, especially in light of the recent interest rate increases. Further asset sales are being progressed to provide additional capital for CEREIT’s asset enhancement programs, as we continue to optimise the portfolio.”
2. The French Divestment
CEREIT has (through EHI France 15 Gondreville Nancy SCI, an indirect and wholly-owned subsidiary) completed the divestment of a light industrial / logistics asset located at Parc du Bois du Tambour, Route de Nancy, Gondreville, France (“Bois du Tambour”) through a deed of sale with a French investor on 9 December 2022.
2.1 Bois du Tambour
Bois du Tambour was constructed between 1980 and 1982 and consists of five main separate structures housing a mix of light industrial / warehouse space and associated offices, 10 km from the centre of Nancy city centre and 355 km from Paris.
Bois du Tambour was independently valued by Savills plc (as commissioned by the Manager, and by Perpetual, in its capacity as trustee of CEREIT) at €7.1 million as at 30 June 2022.
Bois du Tambour was acquired at IPO on 30 November 2017 for €2.0 million (approximately S$2.9 million1 ) and was divested for a consideration of approximately €11.0 million (approximately S$15.7 million).
3. Other Information
The sale consideration was arrived at on a willing buyer and willing seller basis. The net proceeds will be deployed to repay the revolving credit facility and / or for other working capital purposes.
A divestment fee of €0.06 million (being 0.5% of the Sale Consideration) is payable to the Manager in accordance with the trust deed constituting CEREIT.
While CEREIT remains a long-term investor in real estate, divestments from time to time are consistent with the Manager's proactive asset management strategy to improve the risk return quality of CEREIT's portfolio. This is in line with CEREIT's primary purpose to provide CEREIT's unitholders with stable and growing distributions and net asset value per unit over the long term.
4. Financial Effects of the Transactions
Based on the relative figures as computed on the bases set out in Rule 1006 of the Listing Manual, each divestment is a “Non-Discloseable Transaction” within the meaning of Rule 1008 of the Listing Manual. By Order of the Board Simon Garing Executive Director and Chief Executive Officer Cromwell EREIT Management Pte. Ltd. (Company registration no. 201702701N) (as manager of Cromwell European Real Estate Investment Trust) 12 December 2022
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1 Based on an exchange rate of 1.43 $S:1€ as at 9 December 2022
2 Based on independent valuation of €7.1 million as at 30 June 2022
