Cromwell E-Reit to Refinance Netherlands Office Loans and Facilitate Divestment
Early Refinancing of Netherlands Office Loans
The manager of Cromwell European Real Estate Investment Trust (Cromwell E-Reit) announced on Tuesday (Dec 17) that it will refinance its Netherlands office loans early with a higher all-in interest rate facility. The Netherlands office loans had a fixed interest rate of 1.93% and a maturity date in December 2026.
Facilitating Divestment of Stake in Reit and European Fund Management Platform
The early refinancing comes as the manager facilitates the divestment of its stake in the Reit and its European fund management platform to Stoneweg Global Platform. The deal was entered into in May this year and its total consideration was approximately 280 million euros (S$409.3 million).
Terms of the Deal
The sales and purchase agreement entails the sponsor’s entire 27.79% stake, or 156.2 million units, in the Reit at 1.52 euros per unit, as well as its 100% interests in the Reit’s Singapore manager and property manager, on top of other associated co-investments. Stoneweg Group, a Luxembourg alternative investment fund sponsored by Stoneweg Group, will become the Reit’s new sponsor after the transaction.
New Five-Year Debt Facility Agreement
Cromwell E-Reit’s wholly-owned subsidiaries have entered into a new five-year and one-month debt facility agreement for an aggregate amount of 82.4 million euros. The facility will mature in 2030 and will provide more flexibility for managing the future redevelopment planned for one of the secured assets, Ruyterkade.
Higher All-in Interest Rate
The new five-year loan comes with a higher all-in interest rate compared to the office loan’s fixed rate. To offset the higher interest costs expected to be paid for the facility, Cromwell E-Reit received 4 million euros from sponsor Cromwell Property Group. This ensures that Cromwell E-Reit’s distributable income is not impacted due to the early refinancing of the Netherlands office loan as a result of the divestment.
Conclusion
The refinancing of the Netherlands office loans and the divestment of the stake in the Reit and European fund management platform are strategic steps taken by Cromwell E-Reit to reposition its portfolio and reduce debt. The new five-year debt facility agreement provides the company with the flexibility to manage its future redevelopment plans, ensuring that its distributable income is not impacted.
Frequently Asked Questions
Q: What is the total consideration for the divestment of the stake in the Reit and European fund management platform?
A: The total consideration is approximately 280 million euros (S$409.3 million).
Q: Who will become the new sponsor of Cromwell E-Reit after the transaction?
A: Stoneweg Group, a Luxembourg alternative investment fund sponsored by Stoneweg Group, will become the Reit’s new sponsor.
Q: What is the maturity date of the new five-year debt facility agreement?
A: The facility will mature in 2030.
