Singapore Exchange Ltd. · SGX:S68

Singapore Exchange — Cromwell European REIT — Q1 2022 Earnings Presentation

41 slides from Singapore Exchange's earnings presentation, May 12, 2022

  1. Slide 1: Cromwell European REIT 1Q 2022 Business Update

    Cromwell European REIT 1Q 2022 Business Update 12 May 2022

  2. Slide 2: Introduction

    1. Introduction

  3. Slide 3: CEREIT's 1Q 2022 resilient performance: stable occupancy, positive rent reversions

    CEREIT’s 1Q 2022 resilient performance: stable occupancy, positive rent reversions, accretive acquisitions and conservative leverage 1Q 2022 headline €32.5 million €23.3 million €2.43 cents financials 1Q 2022 NPI 1Q 2022 income available for Adjusted NAV³ per unit 5.4% higher y-o-y distribution 7.1%

  4. Slide 4: Strength in logistics portfolio mitigates softening office performance

    Strength in CEREIT’s logistics portfolio mitigates softening office performance Overall portfolio Light industrial / logistics Office 100% 20% 100% 20% 100% 20% 95% 15% 95% 15% 95% 15% 90% 10% 90% 10% 90% 10% Rent Reversion1 Rent Reversion1 Rent Reversion1 Occupancy Occupancy Occupancy 85% 5% 85% 5%

  5. Slide 5: 1Q 2022 acquisitions in Italy and Germany accelerate pivot to logistics

    1Q 2022 acquisitions in Italy and Germany accelerate CEREIT’s pivot towards a majority portfolio weighting to light industrial / logistics  12.7% discount to blended valuation €68.3 million  Freehold light industrial / logistics properties in Italy and Germany; fully-leased out to high-quality ten

  6. Slide 6: Record logistics space take-up and record-low logistics vacancy

    1Q 2022 saw record logistics space take-up and record-low 2.7%1 logistics vacancy rates in CEREIT portfolio’s countries  CEREIT has completed €387 million in light industrial / logistics acquisitions (at a 6.2% blended NOI yield2) since the beginning of 2020 till present  Logistics take up rate in

  7. Slide 7: 1Q 2022 Portfolio and Asset Management Highlights

    2. 1Q 2022 Portfolio and Asset Management Highlights

  8. Slide 8: 1Q 2022 overall portfolio performance: 94.8% occupancy, +4.2% rent reversion

    1Q 2022 overall portfolio performance: maintained high occupancy at 94.8%; 4.6-year WALE with +4.2% rent reversion  Better leasing y-o-y in the Occupancy by country as at 31 March 2022 94.8% light industrial / logistics 100% Denmark Occupancy sector of the portfolio, 95% Finland Marginally down vs.

  9. Slide 9: Light industrial / logistics portfolio performance: record 96.2% occupancy

    1Q 2022 light Industrial / logistics portfolio performance: record 96.2% occupancy; positive rent reversions mostly driven by lease renewals in Paris and Copenhagen Occupancy by country as at 31 March 2022 96.2%  Further lease-up expected in 100% Occupancy Parc de Docks, Paris and in Denmark 95% Up

  10. Slide 10: Most European logistics markets at all-time low vacancies

    Most European logistics markets are at all-time low vacancies, driving higher market rent growth European logistics outlook: vacancy rates (%) Average quarterly logistics market rent growth1 (%) 12.0 3.5% 3.0% 10.0 2.5% 8.0 2.0% 6.0 1.5% 1.0% 4.0 0.5% 2.0 0.0% -0.5% 0.0 -1.0% -1.5% Denmark France Ge

  11. Slide 11: Light industrial / logistics portfolio leasing activity

    1Q 2022 light industrial / logistics portfolio leasing: active leasing in the Netherlands and France; consolidating occupancy in multiple assets Denmark Italy A new lease of 4,044 sqm was signed at Priorparken 700, Brøndby, in Apr 2022, increasing Remaining 575 sqm vacant unit in CLOM, Monteprandone

  12. Slide 12: First greenfield development in the Czech Republic

    Commenced CEREIT’s first greenfield development of ~14,700 sqm A+ grade logistics facilities in the Czech Republic  €15 million logistics development for 14,679 sqm NLA at Lovosice ONE Industrial Park I, Czech Republic, 40% pre- leased, expected completion 4Q 2023  An additional ~20,300 sqm was le

  13. Slide 13: 1Q 2022 office portfolio performance

    1Q 2022 office portfolio performance: core Dutch and Milan office stable; headwinds for Polish and Finnish office due to a mix of structural, economic and geopolitical risks  Impact on France, Finland and Occupancy by country as at 31 March 2022 89.8% Poland due to soft SME conditions Occupancy and

  14. Slide 14: Divergence in demand for office space towards modern quality assets

    Divergence in demand for office space towards modern quality assets and prime locations in Europe’s gateway cities Major CBD office vacancy rates (%) Major CBD office rents (€ per sqm) 20 1,200 18 16 1,000 14 12 800 10 600 8 6 400 4 2 200 0 0 3Q 2010 1Q 2011 3Q 2011 1Q 2012 3Q 2012 1Q 2013 3Q 2013 1

  15. Slide 15: Office portfolio leasing highlights

    Office portfolio leasing highlights: notable lease renewals in Poland and several smaller new leases signed in Italy, France and Finland Italy Finland 1,420 sqm of new leases signed with tenant-customer in Plaza Vivace starting from 3-year new lease signed with tenant-customer for 324 sqm in Pakkala

  16. Slide 16: Financial and Capital Management Highlights

    3. Financial and Capital Management Highlights

  17. Slide 17: 1Q 2022 financial results continue to benefit from new acquisitions

    1Q 2022 financial results continue to benefit from new acquisitions €32.5 million Like-for-like NPI €23.3 million €2.43 cents NPI -4.4% y-o-y Income available Adjusted NAV 5.4% higher y-o-y Mainly due to office sector vacancies for distribution per Unit 7.1% higher than 1Q 2021 Unchanged compared to

  18. Slide 18: Capital management activities help to minimise interest rate risk

    Capital management activities help to minimise interest rate risk 38.6% 6.8x ~1.72% p.a. BBB- Aggregate leverage1 Interest coverage All-in interest rate Fitch Rating ratio2 Total gross debt is fully hedged / fixed Investment grade (stable outlook) As at 31 Mar 2022 As at 31 Dec 2021 Bond covenant To

  19. Slide 19: Debt maturity and fixed hedge expiry profile

    Debt maturity and fixed hedge expiry profile  Staggered maturity profile of 3.1 years with no major debt expiring until November 2023  €67 million cash balance plus undrawn RCF of €124.2 million provides ample liquidity  Fully hedged until October 2022, reverting to ~77% fixed / hedged after; Man

  20. Slide 20: Economic Outlook and Key Takeaways

    4. Economic Outlook and Key Takeaways

  21. Slide 21: 2022 Eurozone GDP growth estimates face headwinds

    Estimates for 2022 Eurozone GDP growth of 2.7% face headwinds from surging energy prices, rising inflation, geopolitical risks and supply chain disruptions  Pent-up consumer demand and investments expected to drive modest European growth and recovery although risks remain  Eurozone GDP growth¹ is

  22. Slide 22: Key risks and mitigating factors

    Key risks and mitigating factors Rising • Most of CEREIT’s leases have an annual inflation adjustment mechanism, with no cap on the review. Some examples include: inflation • In France, there is a specific index for commercial property rent growth, which tracks business inflation metrics • In Italy,

  23. Slide 23: Key takeaways

    Key takeaways Managing for  Closely monitoring and managing impact from rising interest rates, energy prices, inflation, alongside the ongoing headwinds Russia / Ukraine crisis and global supply chain disruptions  Rise in vacancy in CEREIT’s older non-core office assets dampening the light industr

  24. Slide 24: Appendix

    Appendix

  25. Slide 25: European Real Estate Update and Outlook

    European Real Estate Update and Outlook

  26. Slide 26: European Real Estate Investment Volumes

    European Real Estate Investment Volumes Investment volume by sector  Europe’s commercial property market held up well in the first quarter of 2022 against a 400 backdrop of challenges, not least Russia’s invasion of Ukraine in February 350 € billion  Commercial real estate investment volumes reach

  27. Slide 27: Cross-Border Investment in European Real Estate

    Cross-Border Investment in European Real Estate European real estate market review Capital and gateway cities are targets for international investors Cross-border activity: 12 months to 1Q 2022  Capital inflows into the European real estate market reached €33.7 billion in 1Q 2022  In the first qua

  28. Slide 28: CEREIT Overview and Portfolio Highlights

    CEREIT Overview and Portfolio Highlights

  29. Slide 29: 100% European commercial real estate portfolio with ~86% Western Europe exposure

    100% European commercial real estate portfolio with ~86% exposure to Western Europe Purpose: Investment Strategy To deliver stable and growing distributions and NAV per unit growth over the long term  Maintain ~75 - 85% portfolio weighting to €2.5 BILLION1 Western Europe EUROPEAN Investment Proposi

  30. Slide 30: Quality and predominantly freehold mix of light industrial / logistics and office properties

    Quality and predominantly freehold mix of light industrial / logistics and office properties, located in European gateway cities Haagse Poort De Ruijterkade Bastion Centro Logistico Orlando Marconi (CLOM) Parc Des Grésillons Saalepark Jena Den Haag, The Netherlands Amsterdam, The Netherlands ’s-Hert

  31. Slide 31: ESG performance highlights for 2021

    ESG performance highlights for 2021 Environment Social (Stakeholders) Governance  Singapore’s first sustainability-linked  Significant increase in Net Promoter • Formalised green financing framework cross-currency swap with OCBC Score (NPS) reflected in tenant-customer • Winner for the REITs & Bus

  32. Slide 32: CEREIT's strengths and strategy for long-term value creation

    CEREIT’s strengths and strategy for long-term value creation CEREIT’s purpose: Deliver stable and growing distributions and long-term DPU and NAV per unit growth Strategy objective: Future-proofing and simplifying CEREIT’s portfolio into one centred on sustainable light industrial / logistics and co

  33. Slide 33: Cromwell's European presence

    Cromwell’s European presence Office locations European platform €3.7bn Track record of providing investment AUM1 management, fund management, asset management and debt restructuring 160+ properties Specialists 1,980+ Specialists in Core+ and Value Add tenant- commercial real estate customers 220+ pe

  34. Slide 34: CEREIT's portfolio overview as at 31 March 2022

    CEREIT’s portfolio overview as at 31 March 2022 The Netherlands Properties 1141 Finland Properties 14 Occupancy Rate (by lettable area) 94.8% Properties 11 Lettable Area (sqm) 247,941 Portfolio Valuation 2,498.7 million Lettable Area (sqm) 61,946 Valuation (€ million) 664.18 WALE / WALB 4.6 years /

  35. Slide 35: Portfolio composition post recent acquisitions

    CEREIT’s portfolio composition post recent acquisitions  CEREIT has completed €387 million in light industrial / logistics acquisitions (at a 6.2% blended NOI yield) since the beginning of 2020 till present  CEREIT’s portfolio currently has a weighting of 43.2% to light industrial / logistics, adv

  36. Slide 36: Portfolio statistics as at 31 March 2022

    CEREIT’s portfolio statistics as at 31 March 2022 Low capital values and high reversionary yields provide further growth potential for NAV and NPI, through rental reversion, indexation, higher occupancy and asset enhancement initiatives Valuation1 Reversionary Yield2 No. of Assets NLA (sqm) Occupanc

  37. Slide 37: Well-balanced tenant-customer base

    Well-balanced tenant-customer base Total no. of leases as at 31 March 2022 1,022 Total no. of tenant-customers as at 31 March 2022 843 Top 10 tenant-customers Industry trade sector breakdown1 % of Total Headline # Tenant-customer Country Rent1 10% 15% 1 AGENZIA DEL DEMANIO Italy 11.7% 3% 3% 2 Nation

  38. Slide 38: Ongoing plans for ~€250 million of redevelopment / new developments

    Ongoing plans for ~ €250 million of redevelopment / new developments to unlock value and provide relative high yield on cost over the next few years Current redevelopment Potential redevelopment Potential redevelopment Via Nervesa 21 | before De Ruyterkade 5 Via dell’ Amba Aradam 5 | before Artist i

  39. Slide 39: Non-exhaustive glossary and definitions

    Non-exhaustive glossary and definitions All numbers in this presentation are as at 31 March 2022 and stated in Euro (“EUR” or “€”), unless otherwise stated Abbreviations / mentions Definitions Capex Capital expenditure CPI Consumer price index-linked DI Distributable Income available for distributio

  40. Slide 40: Disclaimer

    Disclaimer This presentation provides an interim business update on the operational performance of Cromwell European Real Estate Investment Trust (“CEREIT”) for the first quarter ended 31 March 2022. This presentation is for information purposes only and does not constitute or form legal, financial

  41. Slide 41: Thank You

    THANK YOU If you have any queries, kindly contact: Investors: Cromwell EREIT Management Pte. Ltd. Elena Arabadjieva Regina Firman Chief Operating Officer & Head of Investor Relations Assistant Investor Relations Manager elena.arabadjieva@cromwell.com.sg regina.firman@cromwell.com.sg +65 6920 7539 +6

Cromwell European REIT — Q1 2022 Earnings Presentation on 6ix