Cromwell European REIT - DBS Research 2022-08-15: Higher Valuations Backed By Growing Income

Cromwell European REIT's 1H22 Earnings highlights

Higher revenues and NPI driven by pivot to logistics and light industrial

• Cromwell European REIT (SGX:CWBU)'s 1H22 revenues increased 8.5% y-o-y to EUR107.4m, mainly driven by new acquisitions over the past year, and partially offset by disposals and redevelopments.
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• NPI of EUR67.3m was 4.7% higher y-o-y, also driven mainly by acquisitions. On a like-for-like basis, NPI would have been flat y-o-y.
  • NPI for the logistics property segment grew at the highest rate, at 24.3% y-o-y, driven by pivot to logistics with ~EUR212.6m in acquisitions in FY21 and a further ~EUR92.0m in 1H22.
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1H22 DPU of EUR0.08695; slightly above our estimates

• Cromwell European REIT's 1H22 DPU of EUR0.08695 was 2.3% higher y-o-y, forming slightly more than 51% of our FY22 DPU estimates.
• Distributable income of EUR48.9m was 5.9% higher y-o-y, which includes EUR1.1m of capital gains distribution in lieu of the redevelopment of Via Nervesa 21.
• Cromwell European REIT expected to continue tapping into capital gains distribution in lieu of properties that are taken off for redevelopment. An estimated ~EUR8m in capital gains remain.

Higher occupancies of 95.4% and positive rental reversions

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Dale LAI DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2022-08-15 SGinvestors.io

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