STONEWEG European Real Estate Investment Trust’s (Stoneweg E-Reit) portfolio valuations crept up 0.3 per cent for the second half of the year compared to June 2024, to about 2.2 billion euros (S$3.1 billion).
This comes amid stabilising conditions in Europe, as well as higher rental growth, lower risk-free rates and improved financing conditions for some asset classes, said the manager on Wednesday (Jan 8).
It also highlighted an increase in passing and market rents across the portfolio due to positive economic and market factors, such as inflation and easing monetary policy.
The total portfolio valuation was based on a like-for-like comparison and excluding capital expenditure. Properties that have been sold were excluded from the valuation numbers.
The increase in the Reit’s second-half portfolio value largely stemmed from its logistics and light industrial assets, of which valuations rose in the UK (10.1 per cent), Denmark (4.6 per cent), Germany (4 per cent), Italy (2.4 per cent), Slovakia (2.2 per cent), the Netherlands (1.3 per cent) and France (0.5 per cent).
This was mainly a result of lower terminal cap rates, higher passing and market rents, as well as new leases signed and ongoing rent inflation adjustments, said the manager.
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Simon Garing, chief executive of the manager, said: “Our strategy to pivot the portfolio to majority exposure to the logistics and light industrial sectors continued to benefit (the Reit’s) portfolio and is now 55 per cent of the total portfolio allocation weight.”
In the office sector, valuation declines were recorded in Italy (-0.6 per cent), Poland (-1.3 per cent) and the Netherlands (-2.5 per cent) due to upcoming potential refurbishment and redevelopment projects.
As a result, the value of Stoneweg E-Reit’s office portfolio fell by about 2.3 per cent over the last six months.
A 0.8 per cent valuation decline was also reported in Italy’s “other portfolio”, attributed to an increase in future capital expenditure and decline in passing and market effective rents, which was partially offset by terminal cap rate, discount rates and a fall in vacancy expectations.
Ahead of the Reit’s H2 FY2024 results due Feb 27, the manager is anticipating a net gearing of 40.2 per cent as at end-2024. Net asset value per unit is expected to come in at around 2.05 euros.
Stoneweg E-Reit was previously known as Cromwell European Reit. The change follows the completion of a 280 million euro acquisition of Cromwell E-Reit’s manager by alternative investment group Icona Capital and real estate investment group Stoneweg.
Units of Stoneweg E-Reit ended 1.9 per cent or 0.03 euro lower at 1.56 euros on Tuesday.
