Cromwell European REIT secures 12% uplift in rents despite containment measures

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Cromwell European REIT (CEREIT) has achieved 12.1% in average rent reversions for new leases signed in 1Q 2020, despite containment measures across Europe.

In total, the REIT secured new leases for 24,361 square metres of net lettable area (NLA) across its portfolio during the quarter.

This includes new leases for 14,523 square metres of light industrial and logistics spaces, and 9,838 square metres of office spaces.

The leases for light industrial and logistics spaces recorded 22.1% in average rent reversions, while the office spaces saw a 2.1% uplift in rent reversions.

As a result, Cromwell European REIT’s average occupancy increased from 93.2% as at 31 December 2019 to 94.7% as at 31 March 2020.

Accordingly, gross revenue and net property income (NPI) rose 21.4% and 17.2% year-on-year to EUR48.5 million and EUR31.0 million respectively.

In March 2020, the REIT divested 12 light industrial and logistics properties in the Netherlands, France and Denmark for a premium of 4.1% above valuation.

In the same month, it also completed the acquisition of three properties in Germany, and initiated the acquisition of a fourth asset in the country post-listing.

“The completion of these transactions bear testament to our execution capabilities and the merits of Cromwell’s extensive on-the-ground presence in Europe”, said Simon Garing, CEO of Cromwell European REIT’s manager.

“Importantly, the transactions have enabled us to rebalance and further de-risk CEREIT’s portfolio, providing greater exposure to Europe’s largest economy, Germany, while lowering its exposure to smaller and higher-risk assets”, Garing said.

“The sale of the 12 assets at a premium to their valuation in particular, has reduced the number of SME tenant-customers in CEREIT’s portfolio by 157”, he added.

CEREIT will determine its DPU for 1H 2020 after results for the period.

“The dramatic impact of COVID-19 on the global economy will linger for a long time. As is the case with all sectors of the economy, this may have an impact on CEREIT’s earnings in 2020", warned Garing.

Further information from CEREIT's latest financial report have been updated into the Singapore REITs table.

Related: Cromwell European REIT allays COVID-19 concerns as DPU beats forecast

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