Comprehensive Analysis of Cromwell European REIT and its Peers
Comprehensive Analysis of Cromwell European REIT and its Peers
5 November 2024 by Donavan Tan
Introduction
In this detailed analysis, we explore the financial performance and strategic outlook of Cromwell European REIT (CEREIT) and its peers including Frasers Logistics & Commercial Trust, CapitaLand Ascendas REIT, Mapletree Industrial Trust, and Mapletree Logistics Trust. These insights provide a comprehensive understanding of their market positions and future potential.
Cromwell European REIT (CEREIT)
Cromwell European REIT (CEREIT) is a Singapore-listed Real Estate Investment Trust (S-REIT) that focuses on investing in commercial real estate assets across Europe. As of 30 June 2024, CEREIT manages a diverse portfolio of 107 properties, primarily freehold, located in major cities across the Netherlands, France, Italy, Germany, Poland, Denmark, Czech Republic, Slovakia, Finland, and the United Kingdom.
The portfolio is divided into 54% Logistics and Industrial (L&I) properties and 44% office spaces by assets under management (AUM). CEREIT stands out by offering high-quality assets in prime locations and maintaining a diversified tenant mix. Despite facing challenges such as declining distributions due to asset divestments and rising financing costs, CEREIT’s remaining high-quality assets offer potential for long-term growth and income resiliency.
Key Highlights
- Distributable income increased by 4.1% on a quarter-on-quarter (QoQ) basis.
- Positive rental reversion of 2.3% and a slight increase in portfolio occupancy to 93.9%.
- Secured a new debt facility in preparation for bond refinancing in 2025.
Financial Performance
For the third quarter of 2024, CEREIT’s gross revenue and net property income (NPI) grew by 0.6% and 7% year-on-year (YoY) to EUR 53.9 million and EUR 34.5 million, respectively. While distributable income for 3Q24 decreased by 7.8% YoY to EUR 20.8 million, it increased by 4.1% on a QoQ basis.
Leasing and Debt Refinancing
CEREIT’s portfolio rental reversion for 3Q24 was positive at 2.3%, with a total portfolio occupancy improvement to 93.9%. The L&I segment saw an 8.8% rental reversion, although overall reversions were affected by a single office lease with a -4.3% rental reversion.
In preparation for its EUR 450 million bond maturing in November 2025, CEREIT secured a new debt facility, providing liquidity for the refinancing. This strategy aims to maintain stability in distribution growth post-refinancing.
ESG Initiatives
CEREIT leads peers in sustainable investment efforts, with 82% of its office assets BREEAM or LEED certified. The company also excels in corporate governance, with a majority independent board and fully independent committees.
Investment Summary
- Top line turning positive with a breather on divestments.
- Mild positives in leasing with rental reversion and improved occupancy.
- Prepared for debt refinancing in November 2025.
Financial Summary
| EUR million |
FY23 |
FY24E |
FY25E |
| Revenue |
216.5 |
212.5 |
216.3 |
| Net Property Income |
134.3 |
132.0 |
134.3 |
| Distributable Income |
88.3 |
79.0 |
78.2 |
| DPS (EUR cents) |
15.7 |
14.0 |
13.9 |
Frasers Logistics & Commercial Trust (FRAE.SI)
Frasers Logistics & Commercial Trust (FRAE.SI) is a Singapore-listed REIT that invests in logistics and commercial properties. The trust focuses on generating stable and growing distributions for its unitholders through active asset management and strategic acquisitions.
Financial Performance
| EUR million |
FY24E |
FY25E |
| Price/Earnings |
17.5 |
17.6 |
| Price/Book |
0.9 |
0.9 |
| EV/EBITDA |
21.8 |
20.4 |
| Dividend Yield (%) |
6.5 |
6.5 |
| ROE (%) |
4.7 |
5.1 |
CapitaLand Ascendas REIT (CAPD.SI)
CapitaLand Ascendas REIT (CAPD.SI) is another leading Singapore-listed REIT that primarily invests in business space and industrial properties. The trust aims to provide stable and growing returns to its unitholders through proactive asset management and strategic acquisitions.
Financial Performance
| EUR million |
FY24E |
FY25E |
| Price/Earnings |
19.1 |
17.8 |
| Price/Book |
1.2 |
0.6 |
| EV/EBITDA |
19.6 |
19.2 |
| Dividend Yield (%) |
5.6 |
5.7 |
| ROE (%) |
6.3 |
6.5 |
Mapletree Industrial Trust (MAPI.SI)
Mapletree Industrial Trust (MAPI.SI) invests in a diversified portfolio of industrial properties in Singapore and overseas. The trust focuses on providing long-term, sustainable returns to its unitholders through proactive asset management and strategic acquisitions.
Financial Performance
| EUR million |
FY24E |
FY25E |
| Price/Earnings |
18.0 |
17.9 |
| Price/Book |
0.5 |
0.6 |
| EV/EBITDA |
20.7 |
19.8 |
| Dividend Yield (%) |
5.5 |
5.6 |
| ROE (%) |
7.3 |
7.5 |
Mapletree Logistics Trust (MAPL.SI)
Mapletree Logistics Trust (MAPL.SI) is focused on investing in logistics properties across Asia-Pacific. The trust aims to deliver stable and growing returns through active asset management and strategic acquisitions.
Financial Performance
| EUR million |
FY24E |
FY25E |
| Price/Earnings |
21.9 |
20.2 |
| Price/Book |
1.0 |
1.0 |
| EV/EBITDA |
21.7 |
21.0 |
| Dividend Yield (%) |
6.0 |
6.1 |
| ROE (%) |
4.9 |
5.1 |
Conclusion
The analysis of Cromwell European REIT and its peers highlights their strategic approaches, financial performance, and future potential. Each REIT has its unique strengths and challenges, but they collectively represent attractive opportunities for investors seeking exposure to high-quality real estate assets and stable returns. As market conditions evolve, these REITs are well-positioned to navigate challenges and capitalize on growth opportunities.
