Brisbane-based Cromwell Property Group expects to offer €1.1bn in European assets for sale on behalf of investors in two of its largest remaining European mandates over the next 12 months.
Cromwell’s chief executive, Paul Weightman, told analysts today when announcing the group’s fiscal 2018 first-half results, that these investors had decided to take advantage of the current strong demand for stabilised assets.
But with an active transactional programme in place, Weightman said Cromwell also planned to scale up its European platform “by 50%”.
Currently, Cromwell manages €4bn in assets under its European platform, this is up 18% from €3.4bn during the six months period which ended June 30, 2017.
Total group assets under management (AUM) was AUD1.1bn (€703m) higher at AUD11.1bn in the first half of fiscal 2018.
The uplift was due partly to €400m worth of assets in Italy being acquired from Cerberus as mandated by the newly-listed Cromwell European REIT (CEREIT).
Weightman told the briefing that the macroeconomic outlook in Europe was more positive today than at any time since the global financial crisis.
“The appetite of most investors has increased to a point where they are basically chasing large deals,” he said.
“Half of the considerable outbound capital from Asia is targeting European real estate.”
Weighrtman said: “A number of portfolios in the €500m to €1bn range are in the pipeline, and, when they come to the market, we will be able to execute and manage (the assets) with our current infrastructure.”
In the past few years, he said, Cromwell had undertaken transactions valued at between €1bn to €1.5bn a year in acquisitions, and €1.5bn to €2bn in disposals.
In the last six months alone, he added, the group traded more than €2bn in assets.
“We have substantial cash reserves, undrawn long-date bank facilities and our gearing (40.1% – down from 45.2%) is at its lowest level in 10 years,” Weightman said.
The capital management initiatives had put in place the “building blocks” for sustainable long-term growth.