Cromwell European REIT's 1H FY24 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  Bari Europa, Bari Trieste and Piazza Affari. Coupled with higher net finance costs, distributable income and indicative DPU declined YoY. 

Rental Reversion

The rental reversion for 1Q 2024 stands at 9.2%.

Divestment

In 1Q FY23, CEREIT divested Grojecka 5. While in April, CEREIT divested Via Brigata Padova 19 and Grandinkulma. 

Development

Redevelopment for Nervesa 21 was completed in January 2024 and is expected to be fully leased by 3Q 2024. Additionally, there are 4 development opportunities.

Related Parties Shareholding

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

Lease Profile

The lease expiry is well spread and the weighted average land lease expiry is long. However, Income in SGD/major currencies is relatively low.

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 Distribution Breakdown:
• 100% from Operation

Trends

• Flat: Committed Occupancy, Property Yield
• Slight Downtrend: Operating Distributable Income over Manager's Fees
• 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, 3y & 5y
• P/NAV - Above +1SD for 1y; Average for 3y & 5y

Author's Opinion

In comparison to the previous quarter, gross revenue and NPI have remained similar. However, distributable income and DPU experienced a decline of approximately 10%. No detailed information was provided regarding this decline. In terms of debts, there is no refinancing requirement until November 2025.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

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.