CROMWELL European Real Estate Investment Trust (Cromwell E-Reit : CWBU 0%) has sold two assets – one in Finland and another in Italy – for a total consideration of 7.2 million euros (S$10.5 million).

The price represents a blended 2.1 premium to the properties’ latest valuations, said the Reit manager on Monday (Apr 29).

Net proceeds from the sale of both the Grandinkulma and Padova assets will be used to repay the Reit’s revolving credit facility, or for other working capital purposes.

Simon Garing, chief executive of the manager, said that the latest divestment on top of the recent sale of Grojecka 5 in Poland have reduced Cromwell E-Reit’s exposure to Poland and Finland by 1.7 percentage points to about 10.4 per cent.

This is compared with 12 per cent as at end-2022, and is seen to increase the Reit’s logistics and light industrial weighting to 53.2 per cent – up from 53 per cent as at end-March, 2024.

One of the divested properties, Grandinkulma, is located in Vantaa, Finland, near the Tikkurila train station and the Helsinki-Vantaa Airport.

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It was built in 1984 and spans 6,191.4 square metres, comprising retail and office spaces as well as parking spaces in the courtyard.

Grandinkulma was sold to a local real estate developer for 5.4 million euros, or below its independent valuation of 5.6 million euros as at end-2023.

The other asset is a complex of three standalone buildings in Padua, Italy, which have been used as barracks by the Italian military force known as gendarmerie.

These buildings vary in height from one to seven floors and are internally connected through an above-ground passage on the first floor. Its basement level comprises warehouses and nine outdoor parking spaces.

The Padova property was divested for a consideration of 1.8 million euros, above its independent valuation of 1.45 million euros as at end-2023.

Cromwell E-Reit’s manager did not disclose the identity of its buyer, nor the nature of the latter’s business.

“Even though there are very early signs of economic and real estate sector recovery in Europe, our focus remains on keeping Cromwell E-Reit’s gearing in the 35 to 40 per cent board-approved range and maintaining liquidity by preserving cash and keeping sufficient committed undrawn debt facilities,” commented Garing.

“We continue to advance negotiations on other selective divestment opportunities and maintain our judicious use of divestment proceeds towards partial debt repayment, unit and/or bond buybacks and funding of selective accretive asset enhancement initiatives and developments.”

Cromwell E-Reit units ended Friday at 1.46 euros, down one euro cent or 0.7 per cent.