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 from asset divestments between 2Q 2023 to 2Q 2024. Coupled with higher interest costs, distributable income and DPU declined significantly.

Rental Reversion

The rental reversion for 1H 2024 stands at 5.2%.

Divestment

In April, CEREIT divested Via Brigata Padova 19 and Grandinkulma.

Related Parties Shareholding

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

Lease Profile

WALE is long and lease expiry is well spread. However, income in SGD/major currencies is relatively low.

Debt Profile

The cost of debt is relatively low and the fixed-rate debt proportion is high. However, WADM is low with concentrated debt maturity in 2025. Additionally, the unsecured debt proportion is relatively low.

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 (Up to 10 Years)

• Flat: Committed Occupancy, Operating Distribution Proportion
• Slight Downtrend: Slight Downtrend
• Downtrend: DPU from Operation, NAV per Unit, Adjusted Interest Coverage Ratio, Operating Distributable Income over Manager's Fees, Operating Distributable Income on Capital, Operating Distributable Income Margin

Price Range & Relative Valuation Metrics

• Dividend Yield - Average for 1y, 3y & 5y; Above +1SD for 10y
• P/NAV - Average for 1y, 3y & 5y; Below -1SD for 10y

Author's Opinion

In comparison to the previous half-year, gross revenue declined slightly, but NPI has remained similar. However, distributable income and DPU experienced a decline of approximately 10% mainly due to lower interest income and higher tax expenses. In terms of debts, there is no refinancing requirement until November 2025.

On May 23, CEREIT announced that its sponsor (Cromwell Property Group) had entered into a sale and purchase agreement with Stoneweg to divest its stake in the sponsor, manager, property manager, and other associated co-investments. Upon completion, expected by the end of 3Q, Stoneweg will become the new sponsor.

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.