REIT-TIREMENT - REITs Investing & Personal Finance

REITs investment & personal finance


Thursday, November 18, 2021

Cromwell European REIT Review @ 18 November 2021

Basic Profile & Key Statistics

Cromwell European REIT (CEREIT) is a diversified REIT that invests mainly in office, industrial and logistics sectors. CEREIT owns 109 properties across 10 countries.


Performance Highlight

Gross revenue, NPI and income available for distribution increased YoY due to contribution from newly-acquired assets in the UK, the Czech Republic and Slovakia. However, DPU decreased slightly due to an enlarged unitholder base.

The 3Q rent reversion is at 1.2%.

CEREIT has completed the acquisition for Kingsland 21, U.K. on 3 August and a logistics property in Mira, Italy on 1 November. On 9 September, CEREIT has completed the divestment of Parc de Popey    at 53% of the IPO purchase price.


Related Parties Shareholding

  • REIT sponsor's shareholding is slightly high at 27.905%
  • REIT manager's shareholding is low at 0.383%
  • Directors of REIT manager's shareholding is low at 0.02%

Lease Profile

  • Occupancy is slightly high at 95.3%
  • WALE is long at 4.7 years
  • Highest lease expiry within 5 years is high at 62.8% which falls in 2025 and beyond, without breakdown
  • Weighted average land lease expiry is long at 94.09 years

Debt Profile

  • Gearing ratio is moderate at 37.8%
  • Cost of debt is low at 1.72%
  • All debts are fixed-rate debts
  • Unsecured debt is high at 91.1%
  • WADM is long at 3.5 years
  • Highest debt maturity within 5 years is high at 53.9%, which falls in 2025
  • Interest coverage ratio is high at 5.8 times

Diversification Profile

  • Top geographical contribution is low at 8.4% 
  • Top property contribution is low at 7.8% 
  • Top 5 properties contribution is low at 28.9% 
  • Top tenant contribution is slightly high at 12.3 
  • Top 10 tenants contribution is low at 31.7%
  • Top 3 countries contribution is from Netherlands, Italy and France which contribute around 2/3 of GRI

Key Financial Metrics

  • Property yield is slightly high at 5.5% 
  • Management fees over distribution is low at 5.9 % in which unitholders receive £ 16.95 for every dollar paid 
  • Distribution on capital is high at 4.1%
  • Distribution margin is slightly low at 47%

Trends

  • Slight Downtrend - Interest Coverage Ratio,
  • Downtrend - DPU, NAV per Unit, Property Yield, Distribution on Capital, Distribution Margin
*DPU and NAV per Unit are adjusted for the 5 to 1 consolidation.

Relative Valuation



  • P/NAV - Above +1SD for 1y, 3y and 5y
  • Dividend Yield - Below -1SD for 1y, 3y and 5y

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow REIT Manager's Shareholding
Long WALELow Directors of REIT Manager's Shareholding
Long Weighted Average Land Lease ExpiryConcentrated Debt Maturity
Low Cost of DebtDPU Downtrend
100% Fixed Rate DebtNAV per Unit Downtrend
High Unsecured Debt %Property Yield Downtrend
Long WADMDistribution on Capital Downtrend
High Interest Coverage RatioDistribution Margin Downtrend
Low Top Geographical Contribution 
Low Top Property & Top 5 Properties Contributions 
Low Top 10 Tenants Contribution 
Competitive Management Fees 
High Distribution on Capital

This quarter's performance is similar to the previous quarter and the fundamental remains resilient. With the recent acquisitions in August and November, the 4Q performance is expected to be better. CEREIT has just announced for S$ 750 million perpetual securities programme, where the first issuance of S$ 100 million is priced at a 5% rate. The property management fee and manager's management fee continue being paid in cash since 2020, which is the main reason for the DPU drop as compared to the period before 2020.


Join REIT-TIREMENT Patreon for patron-exclusive posts that cover REITs valuation and more detail on fundamental analysis. You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Telegram Channel - Join to receive updates on new post

REIT-TIREMENT Facebook Page - Support by liking my Facebook Page

REIT Investing Community - Facebook Group where members share and discuss REIT topic


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

No comments:

Post a Comment