For the 9MFY2024, distributable income fell by 8.9% y-o-y to EUR60.4 million mainly due to the REIT’s divestments and higher interest costs.

Cromwell European REIT (CEREIT) has reported a distributable income of EUR20.8 million ($29.9 million) for the 3QFY2024 ended Sept 30, 7.8% lower y-o-y.

Gross revenue for the quarter rose by 0.6% y-o-y to EUR53.9 million while net property income (NPI) increased by 7.0% y-o-y to EUR34.5 million.

For the 9MFY2024, distributable income fell by 8.9% y-o-y to EUR60.4 million mainly due to the REIT’s divestments and higher interest costs.

9MFY2024 gross revenue fell by 1.1% y-o-y to EUR160.2 million while NPI dipped by 0.8% y-o-y to EUR100 million mainly due to divestments. On a like-for-like basis, 9MFY2024 NPI rose by 4.4% y-o-y.

As at Sept 30, the REIT’s net asset value (NAV) per unit, including accrued DPU, stood at EUR2.05, down from EUR2.09 per unit as at June 30.

As at the same period, total portfolio occupancy stood at 93.9% while the portfolio’s weighted average lease expiry (WALE) stood at 4.7 years. The portfolio’s total reversion stood at a positive 2.3%.

Net gearing stood at 39.7% as at Sept 30 with an interest coverage ratio of 3.6 times.

“We are pleased to report that CEREIT delivered overall 7.0% NPI growth in the third quarter, boosted by the completion of Nervesa21 office redevelopment in Milan and Novo Mesto ONE Industrial Park I/III logistics development near Bratislava,” says Simon Garing, CEO of the manager. “CEREIT’s office portfolio NPI grew 13.8%, while the logistics / light industrial sector NPI grew 6.7% for the quarter, reflecting prior strong rent reversion and gains in occupancy.”

“Distributable income for 3QFY2024 was up 4.1% compared to 2QFY2024, reflecting the stabilisation of the portfolio as the asset sale programme, designed to keep net gearing within the board’s policy of 35% - 40% over the medium term, is largely behind us,” he adds.

In October, Garing also notes that Fitch Ratings revised the REIT’s outlook to “positive” and affirmed its investment grade rating of “BBB-“. This shows that the REIT’s recent divestment programme improved the quality of its portfolio by pivoting the weighting to 54% logistics / light industrial sector, while operating conditions in Europe had largely stabilised, he says.

As at 9.22am, units in CEREIT are trading 2 Euro cents lower or 1.21% down at EUR1.63.