Cromwell E-Reit cuts H2 DPU by 14.6% to 1.744 euro cents

CROMWELL European Real Estate Investment Trust's (Cromwell E-Reit) distribution per unit (DPU) fell by 14.6 per cent to 1.744 euro cents (2.79 Singapore cents) for the second half ended Dec 31, 2020, from 2.04 euro cents a year ago.

On a like-for-like basis, assuming FY2019 management fees were paid in cash, H2 2020 DPU is 1.3 per cent below H2 2019's DPU of 1.767 euro cents.

Gross revenue for the six months ended December 2020 was down 1.4 per cent to 93.3 million euros, from 94.7 million euros a year ago, according to results released on Tuesday.

Net property income (NPI) declined by 3.9 per cent on the year to 59.6 million euros, from 62 million euros.

Income available for distribution fell by 14.4 per cent to 44.6 million euros, from 52.1 million euros.

The H2 2020 DPU will be paid out on March 31, after the record date on March 4.

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For the full year ended Dec 31, 2020, DPU was 14.6 per cent lower at 3.484 euro cents, versus 4.08 cents a year ago. On a like-for-like basis, DPU dropped by 3 per cent from 3.59 euro cents.

Income available for distribution was down 8 per cent on the year to 89.1 million euros, from 96.9 million euros.

Gross revenue for the full year advanced by 5.6 per cent to 187 million euros, while NPI rose by 1 per cent to 117.3 million euros. These were largely due to contributions from newly acquired office assets in France, Italy and Poland and light industrial/logistics assets in Germany, the manager said.

Despite headwinds from the Covid-19 pandemic, the Reit’s occupancy rate increased to 95.1 per cent as at end-December. 

Leases for about 8.5 per cent of the Reit’s portfolio in net lettable area were signed in FY 2020, with a total of 178 new and renewed leases for 131,791 square metres of space secured at a positive rental reversion of +2.1 per cent across the Reit’s portfolio in total.

The manager added that it has further de-risked Cromwell E-Reit’s portfolio coming into 2021, extending or renewing 59 per cent of leases subject to expiries or breaks in the first half of 2021. 

The portfolio’s weight average lease expiry profile stood at 4.9 years as at Dec 31, 2020, maintained at similar levels for the past three years.

The board of the Reit manager has also approved the introduction of a distribution reinvestment plan and is proposing to activate it for the H2 2020 distribution. The distribution reinvestment plan gives unitholders an opportunity to acquire new units at a preferential price without incurring transaction costs.

On the outlook, Simon Garing, chief executive of the Reit manager said it will look to further rebalance the Reit’s portfolio, increasing its exposure to the logistics sector closer to 40 per cent weighting and exploring similar opportunities in the post-Brexit UK, while divesting a number of office and other non-strategic assets. 

“We will also continue planning for key redevelopment opportunities in Paris, Amsterdam, and Milan,” he added. 

Cromwell E-Reit units closed at 48 Euro cents on Tuesday, down one cent or 2.04 per cent.

Amendment note: A previous version of this story incorrectly stated Cromwell E-Reit's DPU in the headline as 1.774 euro cents instead of 1.744 cents.