Cromwell E-Reit regains control of Paris site; to receive compensation from government

SINGAPORE - France has agreed to compensate Cromwell European Real Estate Investment Trust (E-Reit) 907,128 euros ($1.4 million) for the trust's loss of potential rental income from its Paris logistics property since its listing, after the French government's decision to not expropriate the site.

The French government had earlier been mulling whether to take possession of the Reit's Parc des Docks site to develop a hospital, university complex and school, according to Cromwell E-Reit's fourth-quarter results presentation dated Feb 27.

The government will thus compensate the Reit for the marketing and leasing activities that were placed on hold for the Parc desk Docks site during its deliberations for the proposed expropriation.

Cromwell E-Reit has also regained full control of the site and renewed its marketing efforts to extend leases and secure new customers, its manager said in a bourse filing on Monday morning.

Current and prospective businesses have expressed "strong interest" in leasing space at Parc des Docks, with its location attracting logistics and e-commerce-related businesses, said Simon Garing, chief executive officer and executive director of the Reit's manager.

The Reit manager expects the property's occupancy rate, which stands at 83 per cent, to increase substantially over the rest of 2019 together with significant positive rental reversion due to its accessibility and proximity to the Paris central business district.

Parc des Docks is a last-mile logistics property situated on a 10-hectare freehold site in an industrial area close to the River Seine in Paris. Last-mile logistics fulfilment refers to the final leg of delivery to the end user.

It has a net lettable area of 73,371 square metres of warehouse and ancillary office space. It was independently valued at 114.1 million euros as at Dec 31, 2018, which is 16.4 per cent higher than the 98 million euros that Cromwell E-Reit paid for it in 2017.

Parc des Docks is also the Reit's third-largest asset by value.

Units of Cromwell E-Reit were trading up 0.5 euro cent or 1.01 per cent at 50 cents as at 9.45am on Monday.