Australia’s Cromwell Group is looking for acquisition opportunities in the office and industrial sectors of the UK and Central Europe as it continues to build out its fund management platforms.
At an analysts’ briefing to announce the group’s full-year results, CEO, Paul Weightman, also said the real estate investment firm had also entered the aged care sector with plans to seed the assets in a new wholesale fund.
Later, speaking to IPE Real Assets, Weightman said Cromwell, which handles transactions valued at €1.5bn to €2bn in Europe each year, is working on “progressively converting more of the stabilised assets into rollover funds”.
Two large mandates in Europe, representing €1.1bn of managed assets, are in the process of being wound down.
“One fund is expected to settle before the end of the calendar year, while the other will continue into 2019,” Weightman said.
He told IPE Real Assets that negotiations, where appropriate, were underway with existing investors to roll over some of the assets into new wholesale funds.
But this might not apply to all investors, in particular, private equity groups with an opportunistic strategy.
Following a successful listing of the Cromwell European REIT in Singapore, Weightman said it was planned to grow that fund and Cromwell was evaluating prospective acquisitions.
He said: “Over one-third of the capital deployed into Europe is now longer dated, and it is our desire, and stated strategy, to see this proportion continue to increase.”
Of new Australian initiatives, Weightman said Cromwell had formed a 50-50 aged care joint venture, LDK Healthcare.
LDK would be the operator of a planned 350-apartment, 500-resident, aged care and retirement community at Tuggeranong in Canberra, which was the seed asset for the new aged care fund.
“We are funding the venture with working capital and development projects from our balance sheet,” he said.
Cromwell has so far invested AUD55m (€34.7m) and will spend another AUD70m and intends to build up a portfolio of AUD200m, he said.
“We have already had a lot of interest from capital partners for such a property trust. We want to develop our assets and sell down to residents before we bring in capital partners.
“We want the partners to see the product and to understand the operating model, and we want to have a pipeline of future products that they can identify when they come in.”