Cromwell E-Reit acquires Czech Republic logistics asset for 10.1m euros

CROMWELL European Real Estate Investment Trust (Cromwell E-Reit) has acquired a Czech Republic logistics asset from an affiliate company of its sponsor for 10.1 million euros (S$16.4 million).

The freehold single-storey logistics building with a two-storey office section is less than three years old. It spans 8,382 square metres (sq m) on a site area of 31,557 sq m, with its external areas accommodating 168 outdoor parking spaces, the manager said in a bourse filing on Monday.

The property was acquired on Friday at an accretive net operating income (NOI) yield of 6.4 per cent with a long weighted average lease expiry (WALE) profile of 6.5 years, with no earlier break clauses. This is compared with the Reit's existing portfolio's NOI yield of about 6.1 per cent and WALE profile of 4.8 years.

The total cost of acquisition is 10.7 million euros, including the acquisition fees payable to the manager in units, as well as other fees and expenses. This will be funded from Cromwell E-Reit's cash reserves, the manager said.

The deal also constitutes an "interested person transaction", but unitholder approval is not needed as the purchase consideration does not exceed 3 per cent of Cromwell E-Reit's audited net tangible assets as at Dec 31, 2020.

The manager does not expect the acquisition to have any material effect on the Reit's net tangible assets.

According to the manager, the asset is 97.3 per cent leased out to three quality tenant-customers with an average lease of 6.5 years. They are logistics company Dachser, transport and logistics company Gebrueder Weiss, and Buehler Motor, which produces electric drive technology.

The asset is located in an industrial park within Hradec Králové in the north-east of the Czech Republic, with no vacancy in the submarket.

The manager said the property has good transport connectivity to the D11 motorway, which is part of the Trans-European Transport Network. The industrial park site also has "good access" to E67, a major motorway which links the Czech Republic with Poland, the Baltic countries and Finland.

Simon Garing, chief executive of the manager, said: "Our focus remains on rebalancing Cromwell E-Reit's portfolio towards 50 per cent exposure to quality light industrial/logistics assets, including in the post-Brexit UK, while divesting a number of office and other non-strategic assets."

Cromwell E-Reit units were trading flat at 2.27 euros as at 10.45am on Monday.