Cromwell Rolls Out European Logistics Fund

Cromwell Property Group has plans to launch a new $800 million European property fund in its latest logistics sector move.

The deal was struck with Korean real estate investment manager IGIS Asset Management, with binding agreements to purchase seven logistics assets in Italy for $85.7 million.

In its announcement to the ASX, Cromwell said the seven logistics assets will form the seed portfolio for a new Cromwell European Logistics Fund, which the company plans to launch in the fourth quarter.

The diversified real estate fund manager has been caught in a bitter dispute with its largest shareholder, ARA Asset Management.

ARA lodged an off-market takeover bid, which last week saw Cromwell urge its security holders to “take no action” on.

ARA lodged a bidder’s statement with the ASX detailing its offer to acquire a further 29 per cent of Cromwell at a cash per security price of $0.88. The offer is 15.3 per cent less than Cromwell’s share price at the end of 2019.

Speaking on its European property fund, Cromwell’s chief investment officer Rob Percy said the move formed part of its “invest to manage” strategy, which the company plans to retain 20 per cent to 30 per cent stakes in each fund in the medium to long term.

The fund will be focused on core logistics assets throughout Benelux, France, Germany and Italy, with a target total gross asset value of between $650 million to $800 million.

“Logistics is a ‘high conviction’ sector we believe will prove resilient in these difficult times,” Percy said.

“The demand for logistics assets is likely to continue to increase, supported by long term structural and demographic trends, especially in urban locations.”

The seven Italian-based assets, located near the cities of Milan (lead image), Turin, Bologna and Verona are fully let to DHL on long-term leases, with settlement on the deal due in September this year.