Cromwell Reit buying Italy office building for $27m

Cromwell European Real Estate Investment Trust (Reit) is acquiring a freehold office building in Italy for €16.9 million (S$27.3 million).

The trust manager said yesterday that Perpetual (Asia), the Reit's trustee, entered into a preliminary sale and purchase agreement on Monday with Savills Investment Management SGR PA.

Savills Investment is the management company of C3 Investment Fund, an alternative investment fund established in Italy with 100 per cent of its units held by Cerberus SICAV-SIF.

Cromwell intends to finance the acquisition through a combination of a third-party loan and a drawdown on the €75 million unsecured revolving credit facility granted by ING Bank.

The Reit may pay an additional consideration for the purchase of the property in Ivrea, near Turin, upon occurrence of an earn-out event, subject to certain allowable deductions.

There will be an earn-out amount plus applicable taxes payable to Cerberus in cash, depending on certain conditions, that is capped at €652,000.

The net lettable area of the property is 17,990 sq m and its occupancy rate is 100 per cent.

Its weighted-average lease expiry is more than five years.

The acquisition is expected to be completed by June 30.

It is not expected to have any material effect on the net tangible assets or the distributions per unit of Cromwell European Reit for this financial year.

A version of this article appeared in the print edition of The Straits Times on April 25, 2018, with the headline 'Cromwell Reit buying Italy office building for $27m'. Print Edition | Subscribe