Cromwell E-Reit acquires logistics property in UK for £10m, 3% below valuation

A WHOLLY-OWNED subsidiary of Cromwell European Reit CWBU (CEReit) has acquired a logistics property in north-west England for £10 million (S$18.8 million), a figure that comes in 3 per cent below its independent valuation of £10.3 million.

In a bourse filing on Wednesday morning, its manager announced the acquisition of the 9,764 sq m building, which sits on a 20,438 sq m land parcel in the logistics location of Kingsland Grange Industrial Estate in Warrington, noting that the £10 million price tag reflects a 32 per cent discount to replacement cost as well.

The freehold single-storey logistics building was constructed in 1980, and was refurbished this year ahead of a new 10-year lease that will expire in May 2031. It is leased fully by local home delivery specialist Panther Warehousing.

CEReit's manager projects a 5.6 per cent net operating income yield on this acquisition, adding that the purchase was made fully in cash. It also raised its light industrial and logistics segment of CEReit's portfolio by 1 per cent to 39 per cent, moving towards its investment strategy of a target 50 per cent portfolio weightage.

Commenting on the acquisition, chief executive of the manager Simon Garing said they have been studying the UK market for some time and were actively seeking accretive opportunities to enter it.

"We look forward to expanding our footprint in the UK, in line with the stated strategy. Cromwell Property Group's experienced local, on-the-ground team has once again proven their local asset management capabilities and was instrumental in securing this deal amidst the highly competitive property market in the UK," he added.

Units in the Reit closed at 2.53 euros on Wednesday, up 3 euro cents or 1.2 per cent.

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