Australia's Cromwell revives pan-European Reit listing after dropping Polish assets from IPO portfolio

SINGAPORE - Australia's Cromwell Property Group is going ahead with its plan to list its Europe-based real estate investment trust (Reit) here - less than two months after it put the brakes on the initial public offering (IPO) process.

Its Cromwell European Reit (Cereit) is coming back to the market, after having axed Polish retail properties from its proposed portfolio.

The group lodged on Wednesday (Nov 15) an amended prospectus for the Reit, after previously citing "market conditions" when it delayed the registration of the IPO prospectus in September.

Trading is now expected to commence on Nov 30, according to the indicative timetable in the prospectus lodged with the Monetary Authority of Singapore.

And Cromwell is eyeing a market capitalisation of roughly €865.7 million (S$1.39 billion) after the IPO, at an issue price of 55 euro cents for each unit, inclusive of the sponsor's stake.

This clocks in lower than the market capitalisation of  €1.2 billion originally envisioned. About 428.54 million units will be offered to public and institutional investors - or a combined interest of 27.1 per cent, assuming that the over-allotment option is not exercised.

Besides tax and working capital, the IPO proceeds would also go towards acquiring properties for the Cereit portfolio, the prospectus said.

It is understood that the listing delay and change in portfolio mix came partly because of investors' concerns over the relatively less-familiar market in Poland.

The revised IPO portfolio is now set to comprise 74 properties, primarily in the office and light industrial and logistics sectors, across five countries in Europe - namely Denmark, France, Germany, Italy and the Netherlands.

Of those properties, 60 are now held by funds that the sponsor group manages, while the other 14 will be acquired from a third party.

The appraised value of the new Cereit portfolio - after the removal of the seven retail properties in Poland - stands at roughly  €1.35 billion, down from about  €1.83 billion before.

The medium- to long-term target portfolio for Cereit, according to the prospectus, will have a geographic focus on western Europe. That part of the continent will house at least 75 per cent of assets, with the rest to come from other parts of Europe.

But market sources said that this does not indicate a pathway to the immediate reintroduction of the Polish assets.

Besides the original two cornerstone investors - Cerberus Singapore and Hillsboro Capital, which are each taking an 11.6 per cent stake - the couple behind property company SingHaiyi Group have also come on board.

According to the prospectus, Gordon Tang and Celine Tang will hold a 13.9 per cent interest.