Cromwell European REIT - DBS Research 2022-11-11: Early Refinancing At A Cost

• See Cromwell REIT's announcement dated 10 Nov 2022 for its 3Q22 business updates.

Improvement in revenues and NPI

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• Earnings from office portfolio were flat y-o-y. Higher revenues from the Netherlands were offset by declines in Italy, France, and Finland. On a like-for-like basis (excluding redevelopment and one-offs), office portfolio reported a 8.6% decline
• Cromwell European REIT's 3Q22’s distributable income of EUR 24.2m was slightly lower by 0.4% y-o-y (would have been flat if income from Via Nervesa 21 was excluded. Via Nervesa 21 is currently undergoing redevelopment).

Pivot to logistics leading to improvement in occupancy rate

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• Office portfolio occupancy inched down slightly by q-o-q to 89.9%. However, dip in occupancy in the Netherlands and France is reported.
• A new lease for 10 years was signed in Haagse Poort (Netherlands), but will only commence in August 2023, bringing committed occupancy to ~94%. However, rental reversions were still positive for leases renewed (+6.1%).
• Only ~4.9% of portfolio leases remain to expire in 4Q22. A further ~14.2% of leases are due to expire in FY23; bulk of it from the light industrial/logistics portfolio.

Financing costs have crept up to 2.28%

• Read more at SGinvestors.io.

Dale LAI DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2022-11-11 SGinvestors.io

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