Cromwell E-Reit to divest light industrial asset in France for 5.8m euros

CROMWELL European Reit (Cromwell E-Reit) has agreed to sell its Parc de Popey asset for 5.8 million euros (S$9.3 million) in cash to an affiliate of "one of Europe's leading boutique real estate investment funds", according to its manager.

In a filing on Tuesday morning, the manager said the sale comes at a 53 per cent premium to the Reit's initial public offering purchase price. The consideration is one million euros or about 21 per cent higher than the property's latest valuation at 4.8 million euros, based on the independent valuation conducted by Savills Advisory Services as at Dec 31, 2020.

Located at 5 Chemin de Popey in Bar-le-Duc, France, the non-core asset of the Reit was built in 1995 and is situated at the entrance of Bar-le-Duc within the extension of the main business district. It is located in the centre of the "Grand Est" region in the east of France, approximately 75 kilometres from Nancy, Metz and Reims.

The asset consists of a single large warehouse building with ancillary office accommodation totalling 15,724 square metres. It is occupied by a major postal service and logistics company which is largely owned by the French government, and is being used as an industrial sorting parcel platform.

Said the manager's chief executive Simon Garing: "Parc de Popey is located 250km east of Paris, France and Cromwell Property Group's French asset management team was able to secure a lease extension recently from the sitting tenant-customer on terms ahead of the valuers' estimated rental value."

He added that the asset's divestment at a premium "further demonstrates (the manager's) ability to realise value and recycle capital effectively".

Cromwell E-Reit is looking to complete the transaction, which is not expected to have a material effect on the Reit's net tangible assets in Q3 of 2021.

Units in the Reit closed at 2.37 euros on Tuesday, up two euro cents or 0.85 per cent.