Cromwell European Real Estate Investment Trust (CEREIT) has sold two office properties in Italy for EUR20.9 million ($29.6 million), which is at a blended 7.7% premium to the latest valuations. One of the divested offices is in Venice and the other is in Florence.
Proceeds from the divestments will be used to repay the revolving credit facility and also for other working capital needs.
These transactions, along with the divestment in Padova, Italy completed earlier in the year, will further reduce the REIT's exposure to the Italian government as a tenant from 20% when the REIT was listed back in 2017 to just 2.2% now.
The divestment has also increased the REIT's exposure to logistics and light industrial sector.
Simon Garing, CEO of the REIT's manager, points out that since the start of 2022, the REIT, which has an NAV per unit of EUR2.05, has divested EUR284.5 million worth of "non-strategic" assets, fetching a "healthy" EUR33.0 million or 13.1% premium to the latest valuations.
With the European Central Bank having cut rates four times this year to 3%, the 2025 outlook has improved for logistics and prime offices.
See also: Manulife US REIT reports 9.3% drop in portfolio valuation, warns of FY2024 loss
"We are now at the tail end of CEREIT’s divestment programme of non-core assets of this cycle, designed to provide a strong balance sheet and recycle capital into AEI and new acquisitions," says Garing.
CEREIT closed at EUR1.59 on Dec 19, up 1.27% for the day, and extending a 12.77% gain year to date.
