Cromwell E-Reit completes 80.3m euro purchase of 3 French office properties

CROMWELL European Real Estate Investment Trust (Cromwell E-Reit) has completed the acquisition of three freehold office properties in Greater Paris, France, which cost some 80.3 million euros (S$122.7 million) in total, its manager said in a filing on Thursday morning.

This was through the direct acquisition of the Lenine asset and the acquisition of all the shares of two companies that hold the Paryseine asset and the Cap Mermoz asset.

Last month, the Reit manager announced these three France acquisitions along with three other acquisitions in Poland for a total purchase price of 246.9 million euros.

In France, the Paryseine and Lenine assets are freehold, majority-office properties with a total of 23,066 square metres (sq m) of net lettable floor area (NLA), including a 10,024 sq m adjacent three-level warehouse. They are located in the Ivry-sur-Seine office district, which is home to several large companies' headquarters.

The Cap Mermoz asset is a freehold office property comprising 10,720 sq m of net lettable floor area. It is 17 minutes away by train from the Paris central business district.

The total cost of the France purchases was about 80.3 million euros, comprising the purchase consideration of 76.4 million euros, an acquisition fee payable to the Reit manager of 800,000 euros, the real estate transfer tax of 700,000 million euros, and 2.4 million euros in professional and other fees and expenses incurred for the transactions.

Of this total cost, five million euros were paid through the issue of 10.9 million units in Cromwell E-Reit, while the rest was funded using part of the proceeds of the private placement.

The 10.9 million units were issued on July 17 to Alix AM, a wholly owned subsidiary of the seller of the Paryseine asset, at an issue price of 46 euro cents apiece.

The private placement of 326.1 million new units in Cromwell E-Reit raised gross proceeds of about 150 million euros.

About 71.4 million euros or 47.6 per cent of these gross proceeds have been used to partially fund the France acquisitions, while 2.6 per cent or 3.9 million euros have been used to pay fees and expenses incurred for the acquisitions and private placement, the manager said on Thursday.

Some 74.7 million euros remain from the gross proceeds.

The three Poland acquisitions have not been completed.

The new Polish freehold assets comprise two predominantly office properties in Krakow and one office property in Poznan.

The three have a total NLA of 76,562 sq m, 100 per cent occupancy, and a 4.7-year WALE (weighted average lease expiry) as at March 31. Key tenants include BGZ BNP Paribas, Motorola Solutions Systems, GSK, UBS Krakow, CapGemini, MAN Group and Santander Group.

Units of Cromwell E-Reit were trading at 49.5 euro cents, down 1 per cent or 0.5 euro cent as at 11.03am.