Stoneweg European REIT, formerly Cromwell European REIT, has reported a total portfolio valuation of EUR2.24 billion ($3.17 billion) for its 105 properties as at Dec 31, 2024.
Valuations were up by 0.3% or EUR6.9 million compared to valuations as at June 30, 2024. According to the REIT manager, the higher valuation reflects the stabilising conditions in Europe and is supported by rental growth, lower risk-free rates and improved financing conditions for selective asset classes.
The higher valuations were thanks to the valuation gain of 2.4% from the logistics and light industrial sectors, but offset by the 2.3% drop in valuation for offices and 0.8% dip for “others”.
The logistics and light industrial sectors now comprise 55% of the REIT’s portfolio while office and “others” have a portfolio allocation weight of 43% and 2% by value respectively.
"I am pleased to report a turnaround in valuations in 2024, which is the result of our teams' proactive leasing and asset management initiatives, as well as a combination of various positive economic and market factors such as lower inflation, easing monetary policy, the valuers' positive outlook on market rents and shifting demand for better quality office stock,” says Simon Garing, CEO of the manager.
"According to CBRE's latest forecasts, the weighted average yield for logistics and office assets in Europe is projected to tighten gradually from 2025 onward by approximately 25 – 75 basis points (bps) over the next five years, while a recent Reuters poll of economists showed the expectation of a further 100 bps cuts to ECB rates over 2025 to a target of 2.0%, with inflation moderating to 2.1% in 2025 supporting the improving valuation cycle,” Garing adds.
See also: Manulife US REIT reports 9.3% drop in portfolio valuation, warns of FY2024 loss
Taking into account the capital expenditure incurred in the period, the amount of debt outstanding, and other factors, the REIT’s pro forma unaudited net asset value (NAV) per unit is expected to be approximately EUR2.05 per unit as at Dec 31, 2024. Its pro forma net gearing stands at 40.2% as of the same period.
The valuations were conducted by Jones Lang LaSalle and Savills Advisory Services.
As at 9.09am, units in Stoneweg REIT are trading 4 cents higher or 1.81% up at $2.25. Units for the REIT’s European-denominated counter are trading 1 cent higher or 0.64% up at EUR1.57.
