Cromwell E-Reit Q1 NPI, gross revenue almost equal to pre-Covid levels on acquisitions in new markets

CROMWELL European Real Estate Investment Trust (Cromwell E-Reit) on Tuesday posted a net property income (NPI) of 30.8 million euros (S$49.6 million) for the first quarter ended March 31, 2021, down 0.4 per cent from 31 million euros the year before.

Gross revenue was nearly unchanged from the year before at 48.5 million euros, according to a business update.

The manager noted that gross revenue and NPI levels were almost equal to pre-Covid-19 levels, as the eurozone economy was not yet affected by the pandemic in the first quarter of last year.

Prolonged Covid-19 lockdowns in most of the Reit's countries of operations led to reduced car-park income and created vacancies in certain light industrial/logistics assets, the manager said.

It also attributed the slight decreases in gross revenue and NPI to rent reduction in some Italian properties and assets, and the disposal of 12 higher-yielding and higher-risk assets in the Netherlands, France and Denmark.

These were partially offset by new income from recently completed acquisitions, particularly a portfolio of 11 modern logistics assets in the Czech Republic and Slovakia. They were acquired for 113.2 million euros, 2.1 per cent below valuation and at a net operating income (NOI) yield of 6.7 per cent, higher than the portfolio NOI yield of 6.2 per cent prior to the acquisition.

Income available for distribution fell by 6.5 per cent to 21.7 million euros for the same reasons affecting gross revenue and NPI.

Cromwell E-Reit completed a 5:1 unit consolidation in May 2021, with the consolidated units commencing trading on May 5.

The Reit pays distributions on a half-yearly basis. For illustrative purposes, however, its manager disclosed that the distributable income for the quarter on a per-unit, post-consolidation basis would be 4.135 euro cents. This is compared to 0.91 euro cent per unit, pre-consolidation in the same quarter last year.

As at March 31, portfolio occupancy stood at 94.6 per cent, on a par with the 94.7 per cent occupancy in the prior corresponding period, but a marginal decline from the 95.1 per cent occupancy rate achieved in the previous quarter ended Dec 31, 2020.

According to the manager, this was mainly due to vacancies in office assets in France and Finland, as well as the departure of an anchor tenant from an asset in Denmark when the customer relocated to Belgium.

Units of Cromwell E-Reit were trading flat at 2.37 euros as at 1.48pm on Tuesday after the results were released.