Czech Asset, Hradec Králové (Cromwell European REIT)

Singapore-listed Cromwell European REIT has further expanded its footprint in the Czech Republic with an EUR10.1 million acquisition.

The transaction, which is for a freehold single-story logistics building with a two-story office section in Hradec Králové, was completed on 4 June.

The asset spans 8,382 square metres on a site area of 31,557 square metres, with 168 outdoor parking spaces.

Is less than three years old and built to premium specifications by LinkCity, a subsidiary of Bouygues Group SA in a joint venture with Cromwell Group.

The acquisition consideration implies a net operating income (NOI) yield of 6.4%, which is higher than CEREIT’s existing portfolio’s NOI yield of approximately 6.1%.

“The modern freehold logistics asset in Hradec Králové complements our recently- completed acquisition of a portfolio of 11 modern light industrial / logistics assets in the attractive markets of the Czech Republic and Slovakia, for a total consideration of €113.2 million”, said Simon Garing, CEO of CEREIT’s manager.

“This latest acquisition will further reinforce CEREIT’s presence in those markets”, he added.

The property is 97.3% leased out to three tenants with an average lease length of 6.5 years.

The acquisition will be funded with cash reserves.

CEREIT was last done on the Singapore Exchange (SGX) at EUR2.26, which implies a distribution yield of 7.71% according to data compiled on the Singapore REITs table.

By Shariffa Al-Habshee

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