Two cornerstone investors in last month’s listing of Cromwell European REIT (CEREIT) have taken a AUD170m (€109m) share placement in parent company Cromwell Property Group.
In a statement to the Australian Securities Exchange today, Brisbane-based Cromwell said the Singapore-based investors – SingHaiyi Group and Haiyi Holdings – will be issued with about 175m of new Cromwell stapled securities.
The announcement comes less than a fortnight after Cromwell listed its European real estate arm – formerly known as Valad Europe – on the Singapore stock exchange, following an earlier failed attempt in September.
Property developer SingHaiyi is listed on Singapore’s main board, and Haiyi is a private holding company. Both entities are associated with Chinese tycoons Gordon Tang and Celine Tang.
Paul Weightman, Cromwell’s CEO, said the investment “signals a strong belief in our platform, investment philosophy and management team”.
He said: “Their investment reaffirms Cromwell’s standing as a global real estate investment manager, and highlights our ability to access capital from across the globe, in particular from Asia.”
Proceeds from the strategic placement will be used both to repay short term debt associated with Cromwell’s investment in CEREIT and for general purposes, including capital expenditure on assets and acquisitions.
Weightman said the CEREIT IPO and today’s announced transaction will position Cromwell to capitalise on future growth opportunities.
“They will also enhance diversity of earnings and capital sources, and help the business manage any possible downside market risk over the next few years,” he said.
The placement was at an issue price of AUD0.9691 per security – representing a 4.9% discount to the 30-day volume-weighted-average price of AUD1.02 to 8 December 8. Cromwell’s market capitalisation is currently around AUD1.81bn.