Cromwell Property Group is seeking up to AUD300m (€192m) equity fundraise to support its growth plans, fund its commitment to Cromwell European REIT (CEREIT) and to repay debt.
The real estate manager has issued securities at AUD98 cents each, representing a 4.9% discount to its last closing price.
Cromwell said the equity raising is partially underwritten, and that together with commitments received from major security-holders, the proceeds are AUD210m.
Cromwell secured the support of its key shareholders, with Singapore-based ARA Asset Management and Gordon Tang taking up pro-rata rights for AUD82m, representing 28.5% of the issue.
The company said some AUD$124m of the proceeds would go to fulfilling its commitment to the Singapore-listed CEREIT to support the latter’s equity raising to fund acquisition of 23 office and logistics assets in Europe.
Paul Weightman, Cromwell’s CEO and managing director, said Cromwell’s equity investment in the CEREIT entitlement offer would maintain its 35.3% holding in CEREIT.
The proceeds of Cromwell’s equity raising would also provide Cromwell with the financial capacity to accelerate the group’s ‘Invest To Manage’ strategy.
Weightman said the raising would enable Cromwell to further leverage its ability to originate value-enhancing opportunities across its businesses in both Australia and Europe, while maintaining “an appropriate level of gearing”.
Cromwell is also actively pursuing several opportunities across its funds platform in Australia and Europe, as well as direct investment opportunities which meet Cromwell’s return hurdles, he said.
In Australia, Weightman said, Cromwell was actively progressing three other significant development opportunities, following completion of major projects such as the AUD130m redevelopment of the Northpoint office/hotel complex, in North Sydney.
“Where appropriate, Cromwell will look to seed and warehouse assets and co-invest in funds to accelerate AUM growth, consistent with our ‘Invest To Manage’ strategy,” he said.
