Cromwell European REIT's Parc des Docks Saint-Ouen. (Photo: Cromwell European REIT)

The French government has agreed to not expropriate the Cromwell European REIT property known as Parc des Docks Saint-Ouen, the REIT’s manager announced on 10 June.

In addition, the REIT will also receive EUR907,128 from the French Republic for the loss of rental income, as leasing activities for the property were placed on hold during the government’s deliberations.

Parc des Docks is a “last mile” logistics property situated on a 10-hectare freehold site in an industrial area close to Paris’ River Seine.

It has a net lettable area of 73,371 square metres of warehouse, and ancillary office space.

The property was independently valued at EUR114.1 million as at 31 December 2018.

This is 16.4% higher than the EUR98.0 million Cromwell European REIT paid for it in 2017, and it is the REIT’s third-largest asset by value.

“We have now regained full control of our 10-hectare site and have renewed our marketing efforts to extend leases, and secure new customers, leveraging Cromwell Property Group’s on-the-ground Paris team”, said Simon Garing, CEO of the REIT’s manager

“Current and prospective businesses have expressed strong interest in leasing space at the asset, given its “last mile” location attracting logistics and e-commerce-related businesses”, he added.

Cromwell European REIT expects the property’s occupancy rate, which currently stands at 83%, to “increase substantially over the rest of 2019”.

“Given the site’s excellent accessibility and proximity to the Paris central business district, significant rental reversion is also expected”, Garing added.

The site also holds significant long-term urban renewal potential given facilities and infrastructure that are being developed in Saint-Ouen sur Seine in preparation for the 2024 Olympics, and the 2026 completion of the Paris Nord Hospital and Medical School, said the REIT.

Cromwell European REIT was last done on the Singapore Exchange at EUR0.50, at a price-to-book value of 0.98, according to data from the Singapore REIT Fundamentals table.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.