This article is from the Australian Property Journal archive
CROMWELL Property Group continues to pursue its capital-light strategy with the exit of its troubled Polish shopping centre fund, sealing a $465 million sale to Prague-based real estate investor SCF.
The sale of the six shopping centres was identified as key to reduce gearing and further its embrace of a capital-light funds management model, and came about as the group posted consecutive financial losses that were driven by significant writedowns to portfolio’s value.
It continues an asset sell-down that began in 2021 and now totals $1.1 billion in sales, “positioning the group to explore value accretive opportunities and continue its transition to a capital-light funds management model”, Cromwell said yesterday
Recently, Cromwell sold a 50% share of its joint venture retail asset in Ursynów, Poland earlier this year to its joint venture partner for $69 million, and a 50% stake of its Italian logistics fund assets for $91.4 million to Hong Kong-based asset manager Value Partners Group.
At home, it sold its Brisbane office tower headquarters for $108.5 million, plus a Village Cinemas in Geelong and a Canberra building leased to the Therapeutic Goods Administration.
The sale of the Cromwell Polish Retail Fund assets is in line valuations announced at its half-year results in February.
“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,” Cromwell said.
Upon completion of the sale of CPRF the group’s headline gearing reduces to approximately 35% within the its target range of 30% to 40%. Look-through gearing is 42%.
Cromwell estimates that the sale will have a proforma earnings impact of -3% and there will be no impact to adjusted funds from operations.
“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,” said CEO Jonathan Callaghan.
“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.”
