Cromwell European Reit procures $16.4m Czech asset
The acquisition will increase CEREIT's exposure to logistics.
Cromwell European Real Estate Investment Trust (CEREIT) has acquired a logistics asset in the Czech Republic amounting to €10.1m ($16.4m) from an affiliate company of CEREIT’s sponsor Cromwell Property Group, according to its manager Cromwell EREIT Management Pte. Ltd.
The asset is a freehold single-story logistics building with a two-story office section. It spans 8,382 square metres on a site area of 31,557 sqm. The external areas accommodate 168 outdoor parking spaces.
The Czech asset is less than three years old and built to premium specifications by LinkCity, a subsidiary of Bouygues Group SA, in a joint venture with Cromwell Group.
It is located in an established industrial park within Hradec Králové, a small but fast growing logistics location in the north-east of the Czech Republic, with no vacancy in the submarket.
Currently, it is 97.3% leased out to three quality tenant-customers with an average lease length of 6.5 years and is already well-known to the property manager, which will enable a smooth and efficient onboarding process and ongoing management.
The Czech asset is being acquired at an accretive net operating income (NOI) yield of 6.4% with long weighted average lease expiry (WALE) profile of 6.5 years (with no earlier break clauses), as compared to CEREIT’s existing portfolio’s NOI yield of approximately 6.1% and WALE profile of 4.8 years.
“Since CEREIT’s listing, the Manager has been working to diversify CEREIT’s sector exposure, geographical footprint and tenant customer base. The modern freehold logistics asset in Hradec Králové complements our recently completed acquisition of a portfolio of 11 modern light industrial / logistics assets in the attractive markets of the Czech Republic and Slovakia, for a total consideration of €113.2 million. This latest acquisition will further reinforce CEREIT’s presence in those markets,” said CEREIT’s manager’s chief executive officer, Simon Garing.
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