Cromwell European REIT's 2H FY23 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

Gross revenue and NPI declined YoY mainly due to lower income resulting from the divestment of Piazza Affari 2 and Corso Lungomare Trieste 29, as well as the absence of income from Maxima, which was under redevelopment. Additionally, higher finance costs offset by a tax reversal contributed to a reduction in distributable income and DPU YoY.

Rental Reversion

The rental reversion for 2H FY23 stands at 5.7%.

Divestment

In 4Q FY23, CEREIT divested Viale Europa 95 and Corso Lungomare Trieste 29 in Italy.

Development

Redevelopment for Nervesa 21 was completed in January 2024. Maxima is currently undergoing strip-out work. Additionally, CEREIT has identified three redevelopment opportunities.

Related Parties Shareholding

The REIT manager and directors of the REIT manager hold a relatively low proportion of shares.

Lease Profile

The WALE is relatively long and the lease expiry is well spread. Additionally, the weighted average land lease expiry is long.

Debt Profile

The adjusted interest coverage ratio and fixed rate debt proportion are relatively high. Additionally, cost of debt is relatively low. However, debt maturity is concentrated.

Diversification Profile

The portfolio demonstrates an excellent diversification profile.

Key Financial Metrics

Operating distributable income on capital is high, and all distributions are derived from operations. Additionally, the management fee is low compared to operating distributable income.

DPU Breakdown

• TTM Distributable Income Breakdown:
• 100% from Operation

Trends

• Slight Uptrend: Committed Occupancy
• Slight Downtrend: Property Yield
• Downtrend: DPU from Operation, NAV per Unit, Adjusted Interest Coverage Ratio, Operating Distributable Income on Capital, Operating Distributable Income Margin

Relative Valuation

• Dividend Yield - Average for 1y; Above +1SD for 3y & 5y
• P/NAV - Average for 1y; Below -1SD for 3y & 5y

Author's Opinion

Compared to the previous quarter, gross revenue, NPI, and DPU remain similar. Regarding debts, there is no refinancing requirement until November 2025.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

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REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.