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Aussie manager Cromwell Property to list $2.2 bil European REIT on SGX: reports

By Samantha Chiew

/ The Edge Singapore |

September 12, 2017 1:03 PM SGT

SINGAPORE (Sept 11): Australian real estate investment manager Cromwell Property Group has launched a roadshow to raise about A$2 billion ($2.16 billion) to back a European real estate investment trust (REIT) listing on the Singapore Exchange (SGX).

According to The Australian, the roadshow will take place in Singapore, Hong Kong, Tokyo and Europe with investment banks such as Goldman Sachs and UBS serving as joint managers and DBS as the joint global co-ordinator.

The Cromwell European REIT is looking to raise about €1.25 billion ($2.01 billion) to list in Singapore by month’s end. This will be Singapore’s first euro-denominated REIT and will face competition from other vehicles investing in US.

The REIT targets to list on September 28 with a market capitalisation of €1.2 billion to €1.25 billion. It owns a portfolio of office, logistics and light industrial as well as retail assets across Denmark, France, Germany, Italy, the Netherlands and Poland, with a total value of €1.83 billion.

The 81 properties that make up Cromwell’s portfolio are mainly from four Cromwell-run funds with some of the assets acquired from Cerberus, the private equity group.

The trust will spin off a yield of 7.5% to 7.7% with Cromwell to take a stake of 8.7% and 12.7%, while Cerberus and Hillsboro Capital will hold 15%.

Paul Weightman, Cromwell chief executive told The Australian, “I think ever since the global financial crisis Australian businesses have been reluctant generally to invest overseas.”

While noting that the Australian market is fairly small compared to the second largest commercial real estate market globally – Europe, Weightman says, “The capital has been fairly unwilling to take the risk of moving offshore. (But) Australia has a very sophisticated real estate market: we have good training and a high level of skills. I think we’ve got something to add — our systems, process and governance and our skills — and we think there is an opportunity to exploit that.”

“There is a general view that Europe has turned the corner. We’re seeing growth and a lot of people are getting very bullish on Europe,” says Weightman.

This story, written by Samantha Chiew, first appeared on The Edge Singapore.

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