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Cromwell E-Reit posts 10-month DPU of 0.0361 euro, beats forecast

CROMWELL European Reit (Cromwell E-Reit) on Wednesday reported that its distribution per unit (DPU) for the 10 months ended Sept 30 was 3.61 euro cents, beating its forecast by 1.9 per cent.

Revenue for the pan-European industrial and commercial real estate investment trust (Reit) came in at 104.3 million euros (S$162.6 million), 2 per cent higher than the 102.3 million euros forecast in its prospectus when it listed in November 2017.

Net property income (NPI) was 69.3 million euros, 4.3 per cent above forecast. The Reit attributed the rise to strong performance from its pan-European light industrial portfolio, which generated higher NPI on better-than-projected leasing outcomes in France and the Netherlands. Its office portfolio and other assets performed largely in line with expectations.

Income available for distribution to unitholders was 57.2 million euros, 1.9 per cent above forecast. Cromwell E-Reit has committed to paying out 100 per cent of its distributable income earned from listing until December 2019.

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"We have now outperformed forecasts in all three reporting periods since Cromwell European Reit’s listing, delivering on our commitment to provide unitholders with stable and growing distributions," said the Reit manager's CEO Simon Garing.

"This was made possible by our active barbell approach to portfolio management, whereby we balance the growth potential from CEReit’s light industrial/logistics assets with the stability and security of leases provided by the office assets."

During the period under review, the Reit's gearing was reduced by 1.9 percentage points to 34.9 per cent as at Sept 30, from 36.8 per cent on Nov 30, 2017.

The Reit manager recently proposed to acquire 23 properties across five countries in Europe for 384.4 million euros, on an initial yield of 6.4 per cent. The acquisition is expected to be earnings accretive, and provide the Reit with greater geographical and trade sector diversity while increasing its portfolio from the current 75 properties valued at 1.39 billion euros as at end-June, to 98 properties valued at 1.8 billion euros.

If the acquisition is approved by unitholders at an extraordinary general meeting to be held on Nov 15, the manager plans to finance it via debt and a proposed fully underwritten and renounceable rights issue.

Units of Cromwell E-Reit closed at 0.51 euro on Tuesday, down 0.04 euro.