Cromwell E-Reit posts 6.3% higher DPU to 1.02 euro cents for Q1

SINGAPORE - Cromwell European Real Estate Investment Trust's (Cromwell E-Reit) distribution per unit (DPU) for the first quarter ended March 31 rose 6.3 per cent to 1.02 euro cents, from 0.96 euro cent a year ago.

This beat its forecast by 5.2 per cent, the pan-European industrial and commercial Reit's manager said on Monday (May 13).

Net property income (NPI) for Cromwell E-Reit was at 26.4 million euros ($40.5 million), 33.8 per cent higher from 19.8 million euros a year ago, beating its forecast of 20.4 million euros by 29.6 per cent.

Gross revenue, meanwhile, rose 31.7 per cent to 40.0 million euros for the first quarter, from 30.3 million euros a year ago. It also beat the forecast of 31.0 million euros by 28.7 per cent.

Cromwell E-Reit attributed the rise in NPI and gross revenue mainly to contributions from the 23 properties acquired after its initial public offering (IPO), with 22 of the acquisitions completed between December 2018 and February 2019.

Income available for distribution to unitholders rose 36.9 per cent to 22.4 million euros, from 16.4 million euros a year ago. This was also 32.3 per cent higher than its forecast of 16.9 million euros.

The Reit's portfolio occupancy stood at 90.2 per cent as at March 31, 2019, with a weighted average lease expiry (WALE) of 4.7 years by leased lettable area.

It added that most of the new leases signed in the first quarter will start from April 2019 or later, thus the full positive impact of the occupancy rate will be felt from the second quarter.

Looking ahead, Simon Garing, CEO of the Reit's manager, said he is confident that Cromwell E-Reit is "well-positioned" to take advantage of accretive acquisition opportunities in Europe with attractive yield or debt spreads, while divesting non-core assets.

Mr Garing was recently appointed as CEO after a stint as acting CEO for eight months.

"We have onboarded the properties and are excited about the prospects of extracting greater value by lifting occupancy rates, renewing expiring leases, and securing positive rental reversions," Mr Garing said.

Together with a "greater resilience of the portfolio", which has now been diversified over seven countries with earnings generated from over 1,000 leases, Mr Garing added that the potential upside from the Reit's proactive leasing activities would allow it to continue delivering "attractive risk adjusted returns to unitholders".

Units of Cromwell E-Reit closed at 0.495 euro cent on Monday, down 0.5 euro cent as at 11.12am.