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Cromwell E-Reit to buy 3 logistics properties in France for 21.6m euros
CROMWELL European Reit (E-Reit) is buying three freehold logistics properties in France for 21.6 million euros (S$33.75 million) to gain exposure to the Greater Paris logistics market, said the manager in exchange filings on Monday.
Under the terms of the deal, Cromwell E-Reit will buy from CDPG Luxembourg all of the shares in Challenger DPG France SAS, which holds all three properties. The purchase consideration includes a 1.7 million euro cash injection in the target company for working capital.
The acquisition will be financed with debt and equity from Cromwell E-Reit's 224.1 million euro, 38-for-100 rights issue.
The three properties are located along the French logistics corridor, in areas Sully-sur-Loire, Villeneuve-lès-Béziers and Parcay-Meslay. The Sully property is fully let to Inteva Products, an automotive supplier for the CSA Peugeot group, while the Parcay building is fully let to Atac, a subsidiary of the Auchan group.
Likewise, the Beziers building is occupied by DHL on a nine-year lease and there are ongoing negotiations with a French retailer to take over the lease.
The target properties have a net initial yields of 8.5 per cent. Cromwell E-Reit's manager said the French properties will increase its portfolio valuation by 2.6 per cent.
Colliers International Valuation UK LLP is the independent property valuer and had valued each of the properties based on the income capitalisation method taking into account comparable market transactions.