The manager of Cromwell European REIT (CEREIT) says it has acquired a freehold intermodal logistics park with nine warehouses and a freight railway terminal in Italy for €52.6 million ($84.2 million).
The asset was independently valued at €54.5 million as at Nov 13 by CBRE Valuations S.p.A. (commissioned by CEREIT), using the income capitalisation method.
The consideration is said to be approximately 3.5% below its independent valuation and about 33% below its estimated replacement cost.
The sale and purchase agreement (SPA) was entered by one of CEREIT’s wholly-owned vehicles on Nov 25.
The park has 156,888 sqm of net lettable assets (NLA), spanning a 421,703 sqm site. Its nine warehouses come with ample loading bays, an office building and a canteen, with some 18,000 sqm of its NLA used for cold storage.
It also includes a railway with four tracks, each about 1km long, with direct loading and unloading platforms and a freight terminal connected to national railway services.
The asset is over 99% let to 24 different occupiers; four major ones being Spinservice and its parent brand Eurospin, Tod’s and White Solution.
The manager says the asset is being acquired at an “attractive” net operating income (NOI) yield of 7.4% and will provide “stable and recurring cash flows”.
In addition, the acquisition will increase the weighting of the light industrial and logistics segment in CEREIT’s portfolio to 32.3%4, up from 30.6% (based on portfolio value) as at Sept 30.
The total cost of the acquisition is said to cost the REIT some €55.1 million. It is expected to be funded from available cash reserves and, or committed undrawn debt facilities.
The acquisition is expected to be completed in December 2020.
See also: Cromwell European REIT to issue $478.2 mil 5-year notes with 2.125% p.a. coupon
“The deal was secured off-market, once again bearing testament to the sourcing capabilities of our extensive on-the-ground European team. We are pleased to welcome renowned Italian brands such as Tod’s, Eurospin and White Solution to our diverse tenant-customer roster,” says Simon Garing, CEO of the manager.
“The logistics park is expected to generate stable and recurring cash flows with scope for further rental upside and will increase CEREIT’s exposure to the resilient logistics sector, which is consistent with our stated purpose of delivering long-term distribution and net asset value per unit growth to unitholders,” he adds.
As at 9.56am, units in CEREIT are trading flat at 47.5 Euro cents.
