Cromwell Property Group is set to make a second attempt to list its European property assets on the Singapore Securities Exchange with a reduced initial public offering, following a failed attempt in September.
The Australian company yesterday submitted a new prospectus to the Monetary Authority of Singapore for a €556m capital raising on revised terms.
Faced with investor resistance, Cromwell withdrew its original initial public offering (IPO) in late-September. It has since reworked the float of what is known as the Cromwell European REIT (CEREIT).
In the latest prospectus, Cromwell removes seven Polish retail centres, valued at €480m, to address investor concerns. The portfolio now includes assets located in France, Germany, the Netherlands, Italy and Denmark.
A source familiar with the original plan told IPE Real Assets: “While we were happy with the assets in Western Europe, we were not comfortable at all with low-yielding shopping centres in Poland.”
According to the prospectus, the reduced portfolio has an appraised value of €1.35bn, instead of the original €1.83bn.
Besides tax and working capital, according to the prospectus, the IPO proceeds will go towards acquiring 14 properties from third parties to bring the total portfolio to 74 assets, mostly offices and light industrial and logistics properties.
The revised prospectus says 60 properties are currently held in various funds, which Cromwell now manages after acquiring the Valad European platform in 2015.
Property securities fund managers in Singapore that spoke to IPE Real Assets said they will not be supporting the IPO, but said it would appeal to high-net-worth individuals and family offices looking for high yields and diversification.
“It is very important to Cromwell to succeed in its second attempt to float the vehicle,” a property securities manager with a US fund management group said.
“These former Valad funds have come to the end of their terms and have to be wound up. Listing a REIT to hold these assets is Cromwell’s logical option, if it is to continue to manage them.”
The source added: “The reason Cromwell invested in the Valad European business initially was to enter the European funds management market.”
Cerebus Singapore and Hillsboro Capital, who were cornerstone investors in the initial CEREIT IPO, are each taking a 11.6% stake in the new float, while Gordon Tang and Celine Tang, a couple behind the Singapore listed property company, Singhaiyi Group, are taking a combined stake of 13.9%.
CEREIT is expected to begin trading on the SGX at the end of this month, according to the indicative timetable.