Cromwell finalises buy-out of Polish Retail Fund investors

Real estate investor and manager Cromwell Property Group (Cromwell) has completed the acquisition of all third party investor interests in the €600 mln Cromwell Polish Retail Fund (CPRF).

With the transaction Cromwell Property Group has decided to exercise its pre-emptive right to buy out the investors in the fund.

The deal, which was first reported by PropertyEU in early 2019, comes two years after the fund was put on the open market. Late last year the CPRF investors agreed to sell the fund and its seven Polish shopping centre assets to CPI Property Group, a Frankfurt-listed CEE specialist with a circa €7 bn portfolio.

The proposed sale to CPI followed disagreement between Cromwell and the fund’s investors about whether the manager was entitled to overrule them and acquire the assets itself.

Cromwell’s European management, which has been charged by its listed Australian parent with growing assets under management, wanted to keep the shopping centres.

The assets had originally been slated for inclusion in an IPO of Cromwell’s European assets on the Singapore stock exchange in 2017, but the offering was scaled back and they were withdrawn.

Cromwell CEO Paul Weightman said this week: ‘Poland is Europe’s success story and is a market we know well and are very positive about. It has been Europe’s fastest growing economy over the past five years, with Gross Domestic Product growth of 4.5% in the 12 months to 30 June 2019. It also has one of the highest expected growths in disposable income, consumer spending and retail sales globally.’

He said that on completion, the shopping centres will be rolled over into a new fund and that while co-investors are being lined up, Cromwell will hold them on balance sheet.

The fund’s original investors included CBRE Global Investors, Sweden’s AP1, Tesco Pension Scheme and the Townsend Group.

CBRE and Eastdil ran the sales process.

The fund contains seven catchment-dominating shopping centres with a Gross Asset Value of €600 mln. The centres have an occupancy rate of 96.3% and a weighted average lease term (WALT) of 5.1 years.
 
Cromwell’s Polish team has been managing and developing the assets for over a decade. In August 2019, Cromwell opened the newest section of Janki Shopping Centre in Warsaw, following the completion of a major €65 mln refurbishment which added gross lettable area of 21,000 m2.
 
In Poland, Cromwell has 34 real estate professionals on the ground, managing 21 assets with more than 660 tenant customers and over 758,000 m2 of space.
 

 

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