Australian Cromwell Property Group has postponed plans for a Euro-denominated REIT listing on the Singapore stock exchange due to 'current market conditions'.
Cromwell European REIT, which initially expected to raise gross proceeds of up to €1.25 bn this month, has put the IPO on hold saying it would re-assess the situation with stakeholders and strategic partners and provide an update in due course.
'Despite receiving significant interest from strategic, institutional and retail investors, given current market conditions, it will not proceed with the registration of the Prospectus for the Cromwell European REIT in accordance with the timetable previously indicated to the market,' Cromwell said in a statement on Friday.
The operation would have created the first euro-dominated REIT on the Singapore stock exchange, and its failure to launch reflects investors' tepid demand for the units.
Cromwell had already reduced the size of the offering as well as committed to take up a larger share, as communicated in a stock market filing in mid September.
'Cromwell continues to believe in the quality of CEREIT's portfolio, its investment thesis, and the exposure it provides to improving European real estate fundamentals,' said Cromwell's chief executive officer Paul Weightman, commenting on the decision to drop the IPO.
Cromwell's planned REIT was initially seeking to tap Asian investors for roughly €900 mln while its sponsor was to retain a 12.7% stake in the investment vehicle, which also had two cornerstone investors - Cerberus Singapore and Hillsboro Capital.
The vehicle draws rental income from 81 commercial properties across six countries in Europe, namely Denmark, France, Germany, Italy, the Netherlands and Poland. The portfolio is valued at €1.83 bn, it has over 1,000 leases and a weighted average lease expiry of 5.1 years.
