Cromwell E-Reit's Q1 operational performance improves due to new acquisitions

CROMWELL European Real Estate Investment Trust (Cromwell E-Reit) recorded rises in its gross revenue, net property income (NPI) and total returns attributable to unitholders for the first quarter ended March 31, 2020.

Gross revenue was up 21.4 per cent to 48.5 million euros (S$74.3 million), from 40 million euros a year ago. NPI rose 17.2 per cent to 31 million euros, from 26.4 million euros the year prior.

Meanwhile, total returns for the period attributable to unitholders stood at 17.5 million euros, up 13 per cent from 15.5 million euros.

These increases were mainly due to contributions from 14 new properties acquired over the past year, partially offset by the absence of income from 13 properties divested between October 2019 and March 2020, the Reit's manager said on Tuesday in a business update.

As Cromwell E-Reit pays unitholders on a semi-annual basis, the actual distribution per unit for the first half of 2020 will only be determined after the Reit's H1 2020 results have been finalised.

The distribution payout ratio will only be determined after taking into account the impact of the Covid-19 pandemic, which cannot be fully quantified at this stage, the manager added.

On outlook, Simon Garing, chief executive of the Reit's manager, said as with all sectors of the economy, the pandemic may have an impact on the Reit's earnings in 2020.

"While we have not yet experienced any material financial impact from Covid-19, we are mindful that a number of our tenant-customers are facing difficulties that cloud their business outlook for the rest of the year," he said.

In view of the uncertainties in the months ahead, the manager is taking measured steps to protect income streams, preserve cash, and reduce costs.

Nonetheless, it remains "very optimistic" about the Reit's long-term value proposition.

Mr Garing added that Cromwell E-Reit's portfolio has been designed for resilience, with logistics assets providing access to the growing e-commerce economy, while office assets provide longer leases to largely government and multinational tenant-customers.

Cromwell E-Reit units were trading at 38.5 euro cents as at 10.13am on Tuesday, down one cent or 2.5 per cent.