Cromwell E-Reit divests Finland office asset; acquires third UK logistics asset

CROMWELL European Real Estate Investment Trust : CWBU 0% (Cromwell E-Reit) is continuing its pivot to the light industrial and logistics sector with the divestment of its largest office asset in Finland and the acquisition of its third logistics property in the UK.

The manager on Thursday (Jul 7) announced the divestment of its Kiinteistö Oy Opus 1 office asset in Herttoniemi, Helsinki, Finland for 16.2 million euros (S$23.2 million). The buyer of the asset is real estate corporation Julius Tallberg-Kiinteistöt Oyj.

The divestment was made at a 20 per cent premium to its 2018 purchase price of 13.5 million euros, and a 6.4 per cent premium to its latest valuation of 15.2 million euros as at Dec 31, 2021, the manager noted.

The Finland office asset, constructed in 2008, has around 6,821 square metres (sq m) in net lettable area and an occupancy rate of 90 per cent. It is located in the submarket of Herttoniemi, about 8 kilometres east of central Helsinki.

Simultaneously, Cromwell E-Reit has acquired its third logistics asset in the UK for £18.9 million (S$31.6 million) from a third-party vendor. The asset is fully leased to Kammac, a UK-focused third-party logistics company, on a 10-year triple net lease.

The freehold, light industrial and logistics property, sitting on a 38,300 sq m site, is located in a “well-established” logistics location in Cheshire. It is close to major cities like Liverpool and Manchester.

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It has a gross lettable area of 14,120 sq m, which consists of a 7,733 sq m high-bay warehouse, a 5,184 sq m normal 9-metre height-bay warehouse and 1,203 sq m in office and other ancillary areas.

The total cost of acquisition is around £20.3 million, which includes the purchase consideration, acquisition fee payable to Cromwell E-Reit’s manager, as well as fees and expenses related to the deal.

The transaction was funded through a combination of Cromwell E-Reit’s existing cash balances and drawing down from a revolving credit facility. This brings the Reit’s pro-forma net gearing as at May 31 to below 38 per cent, the manager added.

Cromwell E-Reit closed 0.02 euro or 1 per cent higher at 1.96 euros on Wednesday.