Cromwell Property plans to list its A$3.1bn (€1.9bn) Australian office portfolio and sell its European assets into funds as a part of a plan to adopt a new “capital-light” strategy.
Speaking to analysts at the company’s first-half results presentation, Cromwell chair, Gary Weiss, said: “In November 2021, we outlined our proposed strategy to simplify the group structure by using our existing portfolio of assets to create new funds and to accelerate the growth in our funds management and development businesses.”
Cromwell CEO, Jonathan Callaghan, said: “In the near term, this will include the launch of various new initiatives, including an externally-managed real estate investment trust (REIT) listed on the ASX.”
Callaghan who recently joined the Brisbane-based company said Cromwell’s existing portfolio included more than A$12bn of assets with interests in Australian, Asia and Europe, putting Cromwell in a good position to become “a capital-efficient global real estate fund manager”.
Callaghan said the Australian portfolio consisted of 17 office assets. These included towers such as 400 George Street in Brisbane. The REIT is expected to be launched this year, but it would depend on the market conditions.
Cromwell has also begun the process to sell its jointly-owned senior living business, LDK Healthcare, based in Canberra.
Pertti Vanhanen, Cromwell’s managing director, Europe, said the company was ready to launch three new funds – Cromwell Polish Retail Fund (CPRF), the Cromwell European Logistics Fund (CELF) and what is known as the Wooden Building Fund.
Vanhanen, who joined in January last year, said Cromwell owned six Polish retail assets and had a half interest in the Ursunow asset it jointly owns with Unibail-Rodamco. The portfolio was valued at A$784m.
Cromwell was planning to reduce its holdings in these retail assets to 20% and would begin offering units in CPRF in March or April.
Vanhanen said it was also planned to seed CELF with its portfolio of seven fully-leased warehouses located in Northern Italy.
The third vehicle is the Cromwell Dasos Wooden Building Fund, and the target close for this fund was the second half of 2022, he said.
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