Cromwell E-Reit completes 80.3m euro purchase of 3 French office properties

Singapore

CROMWELL European Real Estate Investment Trust (Cromwell E-Reit) has completed the acquisition of three freehold office properties in Greater Paris, which cost some 80.3 million euros (S$122.7 million) in total, its manager said in a filing on Thursday.

This was through the direct acquisition of the Lenine asset and the acquisition of all the shares of two companies that hold the Paryseine asset and the Cap Mermoz asset.

Last month, the Reit manager announced these three acquisitions along with three others in Poland for a total purchase price of 246.9 million euros.

In France, the Paryseine and Lenine assets are freehold, majority-office properties with a total of 23,066 square metres (sq m) of net lettable floor area (NLA), including a 10,024 sq m adjacent three-level warehouse. They are located in the Ivry-sur-Seine office district.

The Cap Mermoz asset is a freehold office property comprising 10,720 sq m of net lettable floor area. It is 17 minutes by train from Paris' central business district.

The total cost of 80.3 million euros comprises the purchase consideration of 76.4 million euros, an acquisition fee payable to the Reit manager (800,000 euros), the real estate transfer tax (700,000 euros), and 2.4 million euros in professional and other fees and expenses incurred for the transactions.

Of this total cost, 5 million euros were paid through the issue of 10.9 million units in Cromwell E-Reit, while the rest was funded using part of the proceeds of a private placement.

The 10.9 million units were issued on July 17 to Alix AM, a wholly owned subsidiary of the seller of the Paryseine asset, at an issue price of 46 euro cents apiece. The private placement of 326.1 million new units in Cromwell E-Reit raised gross proceeds of about 150 million euros.

About 71.4 million euros or 47.6 per cent of these gross proceeds have been used to partially fund the France acquisitions, while 2.6 per cent or 3.9 million euros have been used to pay fees and expenses incurred for the acquisitions and private placement, the manager said on Thursday. Some 74.7 million euros remain from the gross proceeds.

The three Poland acquisitions have not been completed. The new freehold assets comprise two predominantly office properties in Krakow and one office property in Poznan.

The three have a total NLA of 76,562 sq m, 100 per cent occupancy, and a 4.7-year weighted average lease expiry as at March 31. Key tenants include BGZ BNP Paribas, Motorola Solutions Systems, GSK, UBS Krakow, CapGemini, MAN Group and Santander Group.