Case Studies

Cromwell has a significant track record in providing holistic real estate solutions which utilise its investment, asset management, development, corporate restructuring and debt and equity capital financing capabilities.

A number of case studies showing these capabilities are set out below:

Corporate Acquisition
CMBS Workout
Bank Workout
Equity Co-Investment
Capital Partnership

Corporate Acquisition

Acquired Investment Adviser and Asset Manager from GE Capital Real Estate

Mandate

  • The Investment Adviser and Asset Manager of the €570 million Polish Retail Fund was acquired from GE Capital in February 2013.
  • The acquisition was funded on balance sheet and included a co-investment in the Fund.

Location

  • Poland

Portfolio

  • Shopping centres
  • Hypermarkets

Highlights

  • The transaction expanded the businesses expertise as a diversified core-plus and value-add Real Estate Investment Manager.
  • The Fund enabled the business to grow further into the retail sector and CEE region, with each component representing almost 20% of total European assets under management following the transaction.
  • The acquisition was funded on balance sheet, inclusive of a co-investment in the Fund, aligning interest with the other investor partners.
  • The transaction was supported by the Fund's investors strengthening existing relationships and also allowing new investors to invest in the fund.
  • As part of the acquisition, the high calibre GE Capital Real Estate Poland team joined the business enhancing the CEE platform and capabilities.

Bank Workout

Mandate

Kefren Properties mandate awarded by Barclays Capital and the Sponsor to manage a sell-down and auction process of a mixed use portfolio of 150+ assets, due to a stressed ICR in a part CMBS structure with LTV default, recovering the full €450 million senior debt position.

Location

  • Sweden

Portfolio

  • 150 mixed commercial assets
  • 830,000 sq m
  • 2,100+ tenants

Objectives

  • Protect and increase rental income
  • Reduce void levels and running costs
  • Execute capital improvement projects
  • Manage assets through accelerated sell-down

Added Value

  • Appointed in April 2010, all of the assets had been sold by December 2011, with 445 new lettings and lease renewals (totalling 176,000 sq m) during this 18 month period.
  • This leasing activity generated new and renewed annual rental income of €13.6 million, equating to a 16% increase and occupancy in the portfolio was increased by more than 21%.
  • The outcome for the Kefren Properties bondholders was full recovery of Senior Loan and part recovery of the Junior Loan, returning €450 million to debt holders.

CMBS Workout

Gemini: Asset management and sale of portfolio for receivers

Mandate

Appointed by Deloitte LLP, as fixed charge receivers and administrators of Gemini (Eclipse 2006 - 3) to asset manage and sell a portfolio of 25 CMBS assets within the Gemini (Propinvest) property portfolio.

Location

  • UK

Portfolio

  • Industrial, office, retail and leisure assets

Objectives

  • Reposition the assets in order to build sustainable value for the receivers to recover.
  • Implement a focussed strategy with asset-by-asset business plans.
  • Protect and increase rental income, reduce void levels and running costs.
  • Provide market-leading reporting to receivers.
  • Agree timescales for exit strategy and orderly disposal programme to maximise capital recovery.

Added Value

  • Appointed in December 2012 to take over the asset management of the mixed portfolio with a clear remit to improve income and capital values throughout the portfolio in preparation for an orderly disposal programme to maximise capital recovery.
  • An intensive asset management strategy focussed primarily on existing tenant customers, letting vacant units and repositioning the assets.
  • Best-in-class tenant management is being applied, using local knowledge and skills to attract and retain a strong mix of tenant customers across the portfolio.
  • The asset management and sales process completed ahead of the planned disposal deadline and achieved an overall sale in excess of 13% of the portfolio's latest valuation.

Equity Co-Investment

ECREL: €250 million AUM, equity co-investment, refinancing

Mandate

Appointed by the investors and Lloyds Banking Group as the senior lender, to manage the €250 million European Commercial Real Estate Limited (ECREL) portfolio which was in a LTV covenant and ICR breach situation and whereby the business  subsequently co-invested to acquire 49% of the equity alongside the original investors.

Location

  • Germany
  • Netherlands
  • Nordics Portfolio
  • 53 mixed commercial assets
  • 315,000 sq m
  • 270+ tenants

Objectives

  • Build sustainable value and cash flow before implementing a five year disposal programme
  • Improve the transparency and robustness of the portfolio accounts and reporting
  • Best-in-class tenant management

Added Value

  • With the LTV covenant and ICR in breach position, an in-depth review of the portfolio structure and outsourcing programme was concluded resulting in operational and administration costs being reduced by 40% during the first 12 month period.
  • During this period, the Weighted Average Lease Expiry improved by 50% with over 100 new lettings and lease renewals undertaken (totalling 103,000 sq m).
  • As a result, the asset sale values during the first year of the mandate were above both valuation and business plan.
  • Subsequently, a €200 million refinancing package was negotiated with Lloyds Banking Group and the business co-invested alongside the original investor to acquire a 49% equity interest.
  • Since then, the portfolio has continued to perform well with €5.8 million of contracted annual income secured on 65,000 sq m in 2012, reducing the vacancy rate from 31% to 16%.
  • Demonstrating value-add asset management of the portfolio, in April 2013, the 24,000 sq m Löwenkontor Building, Spittelmarkt, Berlin, was sold having turned it around from a vacant, single-let asset, to a modern, multi-let office complex, 100% let to tenants on long-term leases at market-leading rents for the area.

Capital Partnership

50:50 Joint Venture with Redefine Properties to acquire the landmark Northpoint Tower in North Sydney, New South Wales, Australia. The asset was purchased in December 2013 post a failed raising by a competitor.

Mandate

The asset was built in 1977 and last refurbished in 1997. Opportunity to significantly reposition asset and activate leasing campaign to fill office vacancies

Location

  • Australia
  • North Sydney
  • Constructed 1977
  • Rental area 35,162 sqm
  • 90+ tenants

Objectives

  • Significantly redevelop, refurbish and reposition asset
  • Grow rental income through development of mixed use op
  • Activate leasing campaign to fill office vacancies

Added Value

Submitted a DA for a 190 room Hotel, an eat-street concept which will have a combination of fast and slow food, and a new roof-top bar area designed to service the ever-growing professional population of North-Sydney. The $130 million Northpoint redevelopment will be a central element of a rejuvenated North-Sydney ahead of the planned removal of a number of commercial and retail buildings to make way for the proposed Victoria Cross Metro station due to open in 2024. The development is due to complete in 2018