Real estate investor and fund manager, Cromwell Property Group (ASX:CMW) (Cromwell), today delivers its full year results for the period ending 30 June 2022 (FY22).

FY22 Results Overview

• Statutory profit of $263.2 million (FY21 $308.2 million) equivalent to 10.05 cents per security (FY21 11.78 cents per security);
• Operating profit of $201 million (FY21 $192.2 million) equivalent to 7.68 cents per security (FY21 7.35 cents per security);
• FY22 distributions per security of 6.5 cents, for a payout ratio on operating profit of 85% and 98% of Adjusted Funds From Operations (AFFO);
• Net Tangible Assets of $1.04 (FY21 $1.02);
• Gearing reduced to 39.6% (FY21 41.8%), within Cromwell’s target range of 30-40%;
• Total assets under management stable at $12 billion (FY21 $12 billion);
• Mr Jonathan Callaghan commenced as new Chief Executive Officer; and
• Revised vision and strategy to support a more capital light funds management model.

Cromwell Chair Dr Gary Weiss, in commenting on the full year results, said, “Cromwell has once again proven to be a strong and resilient company, with our full year results achieved in challenging market conditions and during a period of change for the company.

“The year saw the appointment of Jonathan Callaghan as CEO, a leader who brings significant experience and capability to drive the renewed vision for the business, while the organisation also strengthened its senior management capability with various executive management appointments.

“Pleasingly, FY22 results mark a new era for the company under new leadership, underpinned by a fresh strategic vision to take us forward. The Board is confident in management’s ability to execute on the strategy and to deliver continued strong, ongoing returns to our securityholders,” Dr Weiss said.

Commenting on the FY22 results, Cromwell CEO Jonathan Callaghan said:

“I’m pleased to report a solid result, with management activities undertaken throughout the year focused on building the foundations for our renewed vision. We are fully committed to pivoting Cromwell to become a simpler and more capital efficient business with a greater focus on driving securityholder returns through funds and asset management.

“Similar to FY22, the current financial year will be one of change as we continue to simplify the business and focus on reallocating capital from non-strategic investments to new opportunities which will drive growth in our funds management platform. The management team will continue to take a measured approach to progressively implementing our renewed strategy, taking into account prevailing market conditions, to ensure actions taken are in the best long-term interests of our securityholders.

“Cromwell has also identified further non-core assets to be sold which will initially further reduce gearing, but importantly provide liquidity to capitalise on more targeted opportunities to grow its funds management platform,” Mr Callaghan said.

The full ASX Announcement can be viewed here.

Real estate investor and fund manager, Cromwell Property Group (ASX:CMW) (Cromwell), has today exchanged on the sale of 200 Mary Street, Brisbane for $108.5 million to private markets finance and investment house, Wingate. The sale represents a premium to book value of 8.1% after settlement adjustments.

Located within the golden triangle, the 20-storey building serves as Cromwell’s head office and boasts views over the Brisbane River, hinterland and the CBD. Cromwell has actively managed the asset since it was acquired from AMP in 2001, progressively refurbishing and modernising the quality B-grade building to attract quality tenants and ultimately deliver optimal returns for securityholders.

Cromwell’s Chief Investment Officer, Rob Percy said: “This sale further demonstrates Cromwell’s proven approach to active portfolio and asset management. We have created significant value through repositioning the asset and, with high quality tenants and long-term leases in place, now is the right time to capture significant upside and unlock the value Cromwell has achieved.”

The sale of 200 Mary Street, Brisbane progresses Cromwell’s announced strategy to sell non-core assets, as it transitions to a capital light funds management business in the future, and progressively launches new funds.

200 Mary Street, Brisbane is expected to settle before 30 June 2022. Cromwell has made recent progress on the sale of other non-core assets. This includes the recently completed sale of the Village Cinema Centre in Geelong for $19.775 million and the exchange of contracts on the TGA Complex in Symonston, expected to settle at the end of June 2022. Combined, these non-core asset sales will release over $140 million of capital which will be used to reduce gearing prior to reinvestment in more strategically aligned initiatives.

Cromwell will remain headquartered at 200 Mary Street, Brisbane with its current lease in place until March 2024.

Real estate investor and fund manager, Cromwell Property Group (Cromwell), has acquired Chesser House, located at 95 Grenfell Street, Adelaide on behalf of unitholders in the Cromwell Direct Property Fund (DPF or the Fund) for $81.35 million.

Overview

• Chesser House, located at 95 Grenfell Street in Adelaide, is an 11-storey A-grade office tower with a total net lettable area of 11,121 sqm and a 6.1-year WALE
• The asset has been acquired by the Cromwell Direct Property Fund (DPF), which pays a 5.4% annualised distribution yield, has attracted more than $50 million of gross inflows over the past six months, and delivered a total 12-month return of 14.7%
• Cromwell’s funds provide investors with a regular and reliable income, along with long-term capital potential, with Australia increasingly seen as a safe and attractive option for investment
• Cromwell is committed to growing its global funds and asset management business. This acquisition for the DPF is a further step forward, with the company currently managing $7.8 billion of total third-party funds under management.

Chesser House is an 11-storey A-grade office tower with total net lettable area of 11,121 sqm and a 6.1-year WALE.

The building has undergone significant works which includes the implementation of new end-of-trip facilities, a ground floor lobby upgrade, refurbished lift lobbies and modernised lift cars. A new 93KW solar panel system has also been installed, which generates 17% of the total base building power. This is reflected in the building’s 5-Star NABERS Energy rating.

The Chesser House acquisition strengthens the DPF portfolio and follows its acquisition of two Brisbane CBD assets – 545 Queen Street and 100 Creek Street – in May and October 2021, respectively.

Cromwell’s Head of Retail Funds Management, Peta Tilse, commented, “Chesser House is a fantastic addition to DPF, anchored by the South Australian Attorney’s General Department and blue-chip tenants Serco and CyberCX.

“The Adelaide CBD is set to benefit from significant economic activity as a result of State and Federal Government spending on defence, technology, innovation and biomed. This is headlined by the Department of Defence’s $35 billion Future Frigate project and the $3.6 billion medical precinct, which is set to become the largest health cluster in the Southern Hemisphere.”

DPF currently pays unitholders equivalent to an annualised distribution yield of 5.4% via its exposure to nine high-quality assets across Queensland, New South Wales, Victoria and the Australian Capital Territory.

The Fund continues to be a highly attractive proposition for investors, with more than $50 million of gross inflows coming into the DPF over the past six months, off the back of a strong 12-month performance where the Fund produced total returns of 14.7%.

Ms Tilse added: “Cromwell is seeing very strong demand across its funds management business, with investors seeing Australia as a safe and attractive destination to invest their capital.

“Our retail funds business provides these investors with direct access to high-quality Australian assets, where they can benefit from Cromwell’s proven investment strategy which delivers both strong returns and a regular and reliable income, along with long-term capital growth potential.”

Real estate investor and fund manager, Cromwell Property Group (ASX:CMW) (Cromwell), has today reported its half-year (HY22) results.

HY22 Results Overview

• Statutory profit of $132.5 million (HY21 $145.2 million) equivalent to 5.06 cents per security (HY21 2.53 cents per security);
• Operating profit of $96.4 million (HY21 $99.1 million) equivalent to 3.68 cents per security (HY21 3.79 cents per security);
• HY22 distributions per security of 3.25 cents, for a payout ratio of 88.3%;
• Net Tangible Assets of $1.03 (FY21 $1.02) with gearing unchanged at 42% (FY21 42%);
• Total assets under management increased to $12.1 billion (FY21 $11.9 billion);
• Completion of the review of Cromwell’s strategy; and
• Mr Jonathan Callaghan commenced as new Chief Executive Officer on 5 October 2021.

Cromwell Chair Dr Gary Weiss, in commenting on the past six months, said:

“While the global operating environment continued to be challenging due to the ongoing COVID-19 pandemic, Cromwell has achieved a satisfactory half-year result which reflects the stability and resilience of our platform. Our global team continues to provide on-the-ground operations, so that our securityholders and investors can benefit from our depth of experience and local knowledge across a range of key property sectors.

During the period, good progress was made on a number of fronts, most notably the appointment of Jonathan Callaghan as Managing Director and Chief Executive Officer (CEO) of the Group. Jonathan is an outstanding executive, with deep experience in property and capital markets.

In addition, we have undertaken a strategic review of the business. In November 2021, we outlined our proposed strategy to simplify the Group structure by using our existing portfolio of assets to create new funds and accelerate the growth in our funds management and development businesses. This is well progressed.

This proposed refocused strategy and refreshed vision for the Group has the full support of the Board and we look forward to progressing this initiative which the Board believes will drive long-term value for securityholders.”

To view the HY22 Results Announcement, click here.

To view the HY22 Results Presentation, click here.

Real estate investor and fund manager, Cromwell Property Group (ASX:CMW) (Cromwell), has appointed finance industry veteran Peta Tilse as its new Head of Retail Funds Management.

Ms Tilse brings over 25 years of experience in both the retail and wholesale markets. She was a top-quartile Fund Manager for eight years with Suncorp Investment Management, managing $5 billion in Cash and Fixed Interest Funds and providing wealth advice with UBS, and Goldman Sachs JBWere. Most recently, she conducted asset consulting and investment advisory work for Research IP clients, which represented more than $2 billion in funds under advice.

As Head of Retail Funds Management, Peta will be responsible for continuing to grow Cromwell’s retail funds management business and its funds under management across Australia.

Cromwell CEO Jonathan Callaghan said: “I am delighted to welcome such a highly accomplished industry professional to this pivotal role. The growth of Cromwell’s funds management businesses is a key priority, and I believe Peta’s wealth of experience will be instrumental in making this happen.”

Ms Tilse added: “I’m excited to join such a highly regarded and principled Manager. I look forward to leading the team and continuing to grow and deliver strong outcomes for our investors.”

Ms Tilse serves on the Financial Advice and Services Council for FINSIA, is Director of Levantine Wealth, and the founder of Sophisticated Access.