Cromwell E-Reit manager to refinance office loans early with higher all-in interest rate facility

THE manager of Cromwell European Real Estate Investment Trust (Cromwell E-Reit) on Tuesday (Dec 17) said 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 per cent and a maturity date in December 2026.

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 about 280 million euros (S$409.3 million).

The sales and purchase agreement entails the sponsor’s entire 27.79 per cent stake, or 156.2 million units, in the Reit at 1.52 euros per unit, as well as its 100 per cent 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.

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, which will mature in 2030, will provide more flexibility for managing the future redevelopment planned for one of the secured assets Ruyterkade, said the manager.

The new five-year loan comes with a higher all-in interest rate compared to the office loan’s fixed rate.

Therefore, in order to offset the higher interest costs expected to be paid for the facility, Cromwell E-Reit received four million euros from sponsor Cromwell Property Group.

“This ensures 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),” said the manager.

Units of Cromwell E-Reit ended Monday 0.6 per cent or 0.01 euros lower at 1.59 euros.