Cromwell sells Polish Retail Fund - Cromwell Property Group
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Cromwell sells Polish Retail Fund

Home Cromwell sells Polish Retail Fund

Highlights

  • Cromwell sells the Cromwell Polish Retail Fund (CPRF) for €285million / $465 million to Star Capital Finance (SCF), in line with asset valuations announced at HY24 results.
  • The sale aligns with Cromwell’s strategy to simplify the Group by divesting of non-core investments.
  • The transaction contracted and settled concurrently in Europe on 15 May 2024.
  • Sale proceeds will initially be used to repay debt, reducing headline gearing to approximately 35%[1] (look through 42%1).

Cromwell Property Group (ASX:CMW) (Cromwell or the Group), today announces the sale of six retail centres across Poland, held by the Cromwell Polish Retail Fund for €285 million / $465 million, which is in line with asset valuations announced at HY24 results. The purchaser, SCF, is a diverse real estate investor based in Prague, Czechia.

This follows the sale of Cromwell’s 50% share of its joint venture retail asset in Ursynów, Poland, which completed on 29 February 2024, to joint venture partner Unibail Rodamco for €41.5 million / $69 million.

These transactions are a crucial step in the Group’s continued simplification through the sale of non-core assets to de-risk the business, reduce gearing and realign to Cromwell’s core fund and asset management capabilities.

Upon completion of the sale of CPRF, Cromwell will have completed $1.1 billion in asset sales since commencement of the Group’s asset sale programme in late 2021, positioning the Group to explore value accretive opportunities and continue its transition to a capital-light funds management model.

Following completion, the Group’s headline gearing reduces to approximately 35%1 (look through 42%1), well within the Groups target range of 30-40%. Cromwell estimates that the sale will have a proforma earnings impact of -3%[2] and there will be no impact to adjusted funds from operations (AFFO)2.

CEO Jonathan Callaghan commented, “The completion of this sale, and subsequent debt repayment, significantly simplifies our business, bringing us closer to our goal of being a capital-light fund manager. The simplification of the Group’s business model will allow us to focus on our core fund and asset management skills to drive long-term securityholder value from growth initiatives locally when market timing is conducive.”

[1] Proforma gearing after assets sold or currently contracted for sale.

[2] Based on FY24 proforma earnings / AFFO.