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Commercial Property News
Ciref in new Australian gamble
Ciref Plc, the London-based AIM-listed property investment vehicle, has bought a 13% stake in Cromwell Group, a listed Australian Property Trust, for £42.5million.
Ciref bought the stake after successfully placing 23 million new ordinary shares at 52p each to part-finance the deal. It had asked for its shares to be suspended ahead of the announcement. That has now been lifted.
Cromwell consists of an Australian Real Estate Investment Trust and an Australian property funds management business. It holds a AU$1.2billion portfolio of Australian commercial property, with a 99.8% occupancy level, mostly from government and blue-chip tenants.
The purchase has been made through Ciref's Redefine Income Fund Ltd, with cash and a bridging loan of £15million.
Ciref Chairman Gavin Tipper said "This investment further develops Ciref's position as an international property investment company. Although the investment is in a geographical area outside of the company's traditional investment location, this is an exciting opportunity to invest in a high quality, high yielding property portfolio which should significantly enhance the quality of Ciref's future earnings".
Ciref previously joint-venture funded a string of shopping centre schemes built by collapsed Salford-based developer Modus Ventures, which it has used some of it's placement funds to refinance. To take what will be an expensive bridging loan to do this deal, Ciref must feel that there will be an almost immediate gain to be made at Cromwell, who in 2009 did record a loss of of AUD113.5 million (2008: profit of AUD119.9 million). The 2009 financial year was impacted by a number of non-cash one-off items including a loss from fair value adjustments and write downs of AUD150.1 million (2008: gain of AUD30.1 million). Adjusted profit from operations was AUD63.8 million (2008: AUD70.8 million).
Ciref bought the stake after successfully placing 23 million new ordinary shares at 52p each to part-finance the deal. It had asked for its shares to be suspended ahead of the announcement. That has now been lifted.
Cromwell consists of an Australian Real Estate Investment Trust and an Australian property funds management business. It holds a AU$1.2billion portfolio of Australian commercial property, with a 99.8% occupancy level, mostly from government and blue-chip tenants.
The purchase has been made through Ciref's Redefine Income Fund Ltd, with cash and a bridging loan of £15million.
Ciref Chairman Gavin Tipper said "This investment further develops Ciref's position as an international property investment company. Although the investment is in a geographical area outside of the company's traditional investment location, this is an exciting opportunity to invest in a high quality, high yielding property portfolio which should significantly enhance the quality of Ciref's future earnings".
Ciref previously joint-venture funded a string of shopping centre schemes built by collapsed Salford-based developer Modus Ventures, which it has used some of it's placement funds to refinance. To take what will be an expensive bridging loan to do this deal, Ciref must feel that there will be an almost immediate gain to be made at Cromwell, who in 2009 did record a loss of of AUD113.5 million (2008: profit of AUD119.9 million). The 2009 financial year was impacted by a number of non-cash one-off items including a loss from fair value adjustments and write downs of AUD150.1 million (2008: gain of AUD30.1 million). Adjusted profit from operations was AUD63.8 million (2008: AUD70.8 million).
Tue, 29th Dec 2009