Cromwell E-Reit’s H2 DPU rises marginally to 0.08494 euro
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Michelle Zhu
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CROMWELL European Real Estate Investment Trust (Cromwell E-Reit) posted a distribution per unit (DPU) of 0.08494 euro for the half-year ended December 2022, up by a marginal 0.4 per cent from its H2 FY2021 DPU of 0.08459 euro.
Gross revenue for the half year rose 13.4 per cent on year to 114.7 million euros (S$163.3 million) from 101.1 million euros, while net property income (NPI) increased 5.1 per cent to 69.4 million euros, from 65.8 million euros the previous year.
Income available for distribution rose 0.6 per cent to 47.8 million euros from 47.5 million euros previously.
The top line increase for H2 was mainly due to new acquisitions and indexation in rentals – plus increased operating expense, of which a considerable amount is recoverable, said its manager on Friday (Feb 24).
Net finance costs grew 34.5 per cent to 13.9 million euros versus 10.4 million euros the previous year. This was due to increased interest expenses incurred on a higher debt balance, a rise in the three-month Euro interbank offered rate, and slightly higher margin on a new loan.
Trustee fees and other trust expenses rose 70.1 per cent to 4.7 million euros, from 2.8 million euros the previous year. The variance was mostly due to higher foreign exchange losses in H2, said the manager.
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Cromwell E-Reit also recorded other losses of 55 million euros as opposed to a loss of just 0.6 million euros in H2 FY2021, as a result of a fair value loss on investment properties in H2.
For FY2022, DPU was up 1.3 per cent at 0.17189 euro from 0.16961 euro in FY2021. Gross revenue and NPI were up 11 per cent at 222.1 million euros in FY2022, and 5.1 per cent at 136.8 million euros from 130.1 million euros in FY2021. (*see amendment note).
The Reit manager’s chief executive Simon Garing said that the Reit’s full-year DPU growth “would have been close to 10 per cent” if not for divestments, higher non-recoverable operating expenses, increased effective income tax rates and higher interest costs.
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As at end-December 2022, the Reit’s portfolio occupancy stood at a record high of 96 per cent – a one percentage point increase from the previous year.
Near-full occupancies were reported in the Reit’s four core markets – the Netherlands, Italy, France and Germany. This accounts for about 75 per cent of overall portfolio value.
About 18 per cent of the portfolio was leased or renewed during H2 at a positive rent reversion of 7.6 per cent.
The portfolios’ weighted average lease expiry as at end-2022 remained unchanged at 4.6 years.
Garing believes the Reit’s income growth will be supported by high occupancy, rising market rents and indexation.
“Sustainable developments and asset enhancements will further improve the overall quality of the portfolio and provide growth in DPU and net asset value over the medium term,” he said.
Units of Cromwell E-Reit ended Thursday unchanged at 1.65 euro.
Amendment note: This article has been edited to clarify that full-year NPI for FY2022 stands at 136.8 million euros, up 5.1 per cent from 130.1 million euros in FY2021.
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