Cromwell to manage Finnish logistics portfolio

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06/02/2024

Real estate investor and fund manager Cromwell Property Group (ASX:CMW) (Cromwell or Group) has been appointed manager of a portfolio of five logistics assets in Finland acquired by Goldman Sachs from Inmark Asset Management.

Leased to Posti Group Corporation, the state-owned delivery and fulfilment company with operations in Finland, Sweden and the broader Baltic region, the assets comprise at total of 134,000 sqm of space located in the dominant cities of Tuusula (part of the Helsinki metropolitan area), Tampere, Pirkkala, Oulu and Kuopio.

Commenting on the acquisitions, Pontus Flemme Gärdsell, Head of Northern Europe at Cromwell Property Group, said: “Leased to a strong covenant, these assets provide an excellent investment opportunity in the Nordic logistics market. We anticipate more transactional activity this year in Finland as inflation continues to come down and we have a better understanding of the impact of the ongoing war in Ukraine.”

Over the past 12 months, we have seen a heightened interest from overseas investors in well located assets in this sector across Finland.”

The Nordics represents one of Europe’s most established markets for logistics assets and is supported by strong operating fundamentals, including resilient demand, limited supply, and low vacancy rates. Cromwell manages more than €350 million of assets across Finland, Sweden and Denmark.

Nervesa21 office redevelopment in Milan 70% pre-let

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22/01/2024

Real estate investor and fund manager Cromwell Property Group (ASX:CMW) (Cromwell or Group) has, on behalf of CEREIT, pre-let 70% of available space at the Nervesa21 office development in Milan, leaving only 3,000 sq m of space remaining.

Anchor tenant Universal Music Group, a world leader in music-based entertainment, pre-leased eight floors a year before completion. Scalapay, the first Italian “unicorn” and one of the biggest European BNPL (“buy now, pay later”) providers, signed a pre-lease for two floors and Edelman, an award-winning global communications consultancy firm, pre-leased one floor.

The redevelopment works are largely finished, with the premises successfully delivered to tenants pending some final minor works to be completed in January 2024.

Nervesa21 was re-configured to offer 14 modern floors, a modular flexible layout, premium amenities, two rooftop terraces and four panoramic elevators.

Developed with a strong focus on ESG, the redevelopment includes 5,300 sqm of external green garden leisure space, end-of-trip bicycle facilities and 230 parking spaces – some of which will have electric vehicle charging stations and will be powered by a combination of on-site renewable energy from solar panels and energy sourced from 100% renewable energy suppliers. Up to 50% of the façade is composed of low-carbon glass that, thanks to its integrated value chain, is expected to achieve up to 40% reduction of the embodied carbon footprint of the glass. Upon completion, the redevelopment is expected to attain LEED Platinum and WELL Gold certifications, making it one of the most advanced Grade-A offices in terms of ESG and energy efficiency, with reduced energy consumption of up to 40% compared to similar buildings.

Nervesa21 is strategically located in the Porta Romana district of Milan, south-east of Milan’s city centre. The asset is near Corso Lodi and has direct access to the A1 highway, the Linate Airport and the Central Station.

Commenting on the lettings, Michael Bohde, Head of Southern Europe at Cromwell Property Group, said: “To have pre-let 70% of the space at Nervesa21 is a fantastic endorsement of the office development’s credentials. As our new occupiers commence fit-out work, we are experiencing a strong level of interest in the remaining space from businesses attracted by the building’s ‘oasis-like’ location close to Milan’s bustling city centre.

“The successful execution of this project provides further evidence that occupiers are increasingly focused on ESG criteria when selecting an office location, seeking the best quality space with modern staff facilities, good access to public transport, parking and high energy efficiency. Office buildings with these features are in undersupply across Europe’s major cities.”

Cromwell was advised by CBRE and DILS on the lettings, the general contractors Nessi & Majocchi and the architects at DEGW / Lombardini 22.

Cromwell releases full scope 3 inventory, sets short and long-term emission reduction targets

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22/01/2024

Real estate investor and fund manager Cromwell Property Group (ASX:CMW) has today released for the first time its full scope 3 emissions inventory, becoming one of the few Australian commercial property organisations to publish its emissions footprint across 100% of its global network and supply chain.

The inventory release covers all Cromwell scope 3 emissions across upstream and downstream activities, covering its entire supply chain of tenant activities; funds under management; joint ventures; and embodied carbon sources. It goes further than general sector reporting practices, where disclosure is often limited to scope 3 emissions where a company possesses operational control.

Alongside the disclosure of its scope 3 emissions inventory, Cromwell has today also released new short and long-term emission reduction targets which will help underpin future decarbonisation efforts.

This includes a net zero target across Cromwell’s entire portfolio for scope 1, 2, and 3 emissions by 2045, which includes tenant emissions and embodied carbon. In addition, Cromwell has also set a short-term target of a 42% reduction in scope 1, 2 and 3 emissions by 2030, along with a net zero target for new developments by 2030 and 2035 for all assets under Cromwell’s operational control.

Group Head of ESG, Lara Young, said: “Developing a full scope 3 inventory provides us with an accurate and meaningful picture of all emissions across our supply chain for the first time. It enables us to make more informed investment decisions on decarbonisation activities, working with our partners.

“Specifically, we have now shifted our focus to asset-level decarbonisation. In the last year, we have started to undertake assessments at specific sites to identify emissions sources and create bespoke plans to reduce these emissions, which we will do working in partnership with our service providers. We’ll continue this process going forward.”

Case studies

Cromwell has recorded positive progress across its current decarbonisation and emissions reduction activities, with scope 1 and 2 emissions reducing by 44% since FY22 and a 19% reduction across scope 1, 2, and 3 emissions since FY22. Examples of initiatives include:

  • The large-scale electrification upgrade of the 24-storey McKell Building, converting the existing commercial gas-fired heating system to an electric heat recovery reverse cycle heating, ventilation, and air conditioning (HVAC) system. This was a first of its size for the Sydney CBD and will achieve a 5% reduction in total building electricity consumption.
  • Cromwell’s solar programme which now includes 502kw of solar installation in Australia, which has reduced annual emissions by 538tCO2e, or up to 52% at each site. Cromwell is planning an additional five solar projects in Australia and three in Europe in FY24 to further reduce emissions.
  • Investing in sustainable technology and materials, including the refurbishment of CEREIT Nervesa 21 in Italy, where innovative and low-carbon glass was used instead of standard glass, which helped to record a significant reduction in the building’s embodied emissions.

ESG Report

The information above has been released today as part of Cromwell’s FY23 ESG Report. The full report can be found here.
In summary, the ESG Report highlights Cromwell’s long-term targets which include:

  • Achieve net zero operational emissions (scope 1 & 2) by 2035.
  • Achieve net zero operational emissions for the entire portfolio (scopes 1, 2, & 3) including tenant and embodied carbon by 2045.
  • Significantly reduce our gender pay gap year on year.
  • Achieve 40:40:20 workplace gender diversity at all levels.
  • Integrate ESG into risk registers and business strategy, including objectives and key results.

“Cromwell recognises the challenges that the property industry faces; however, we also recognise the opportunity to deliver tangible positive impacts. The Group has a global in-house ESG team and dedicated Australian and European teams that support all Cromwell activities,” said Ms. Young.

Cromwell reorganises European operations

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07/12/2023

Real estate investor and fund manager Cromwell Property Group (ASX:CMW) (Cromwell or Group) today announced the reorganisation of its European operations to be more aligned with its investors’ strategies, and to improve efficiency in the current challenging market environment.

The reorganisation involves the creation of a regional structure comprising two European regions, which will be headed by Pontus Flemme Gärdsell for Northern Europe, and by Michael Bohde for Southern Europe, both reporting directly to Andy Creighton, Head of Investment Management, Europe. These two regions will replace the former structure, where each country had its own country head.

Pontus will be responsible for managing Cromwell’s investment and asset management activities in the Nordics, the Netherlands, the UK and CEE while Michael will be responsible for managing Germany, France and Italy.

Commenting on the changes, Pertti Vanhanen, Managing Director, Europe at Cromwell Property Group, said: “By streamlining our European business, we will be able to provide a greater focus on the countries our investors are showing most interest in. It will also enable us to improve operational efficiencies in the current challenging macro-economic environment, providing our clients with more integrated cross-border investment and asset management services”.

In the past 18 months, Cromwell has been active across Europe and the UK servicing longstanding mandates with clients such as CEREIT, the Singapore-listed REIT, as well as several new international mandates and marketing new strategies to investors.

Vanhanen, added: “Since the onset of higher interest rates, the market has changed significantly as investors and managers adjust strategies to cope with the higher cost of finance and structural changes impacting the sector. Foremost among these are how we improve the sustainability and carbon footprint of real estate assets and how we reposition buildings in sectors like offices where behaviours have changed”.

Cromwell has made significant progress in these areas, implementing a sustainable finance framework to support the transition to more sustainable borrowing across its portfolio and is currently premarketing a value-add office repositioning strategy in the UK.

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Cromwell achieves new highs results in Global Real Estate ESG Assessment

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November 28, 2023

Cromwell achieves new highs results in Global Real Estate ESG Assessment

Real estate investor and fund manager Cromwell Property Group (ASX:CMW) (Cromwell) has delivered record high company benchmarks in the annual Global Real Estate Sustainability Benchmark (GRESB) global rankings.

GRESB is an independent organisation that provides validated ESG performance data and peer benchmarks for investors and managers to improve business intelligence, industry engagement, and strategic decision-making.

The 2023 GRESB ESG Benchmark has become increasingly competitive, growing to cover more than USD$ 8.8 trillion of gross asset value across 2,084 real estate entities. GRESB data is utilised as an investment decision-making tool by over 170 institutional investors with more than US$51 trillion AUM.

Group Head of ESG, Lara Young, said Cromwell Property Group our longstanding participation in the assessment is a good opportunity for the organisation to demonstrate its ongoing commitment to enhance its ESG performance and test itself against the worldwide market.

Participation in GRESB is Cromwell’s opportunity to measure our ESG performance against our peers, and this year’s efforts have not disappointed.
Lara Young – Group Head of ESG, Cromwell Property Group

“Participation in GRESB is Cromwell’s opportunity to measure our ESG performance against our peers, and this year’s efforts have not disappointed.” said Ms. Young.

  • The Singapore-based Cromwell European Real Estate Investment Trust (CEREIT) achieved a record-high overall score of 85 points in the 2023 GRESB Real Estate Assessment, with full marks for social and governance aspects. CEREIT was awarded a four-star rating – up from a three-star rating last year – and achieved a public disclosure score of a perfect 100, placing first out of its five peers.
  • The Cromwell Diversified Property Trust (DPT) maintained its score of 87 points, ranking 28th out of 41 participating listed Australian office portfolios and achieving 95 out of 100 (A Grade) for public disclosure. With Australia’s real estate sector leading the world in sustainability, ranking first in GRESB for the last 12 consecutive years, DPT has consistently performed well against the hyper-competitive local market.
  • Cromwell Polish Retail Fund (CPRF) achieved a five-star rating and a record-high overall score of 90 points, ranking 11th out of 32 European retail non-listed peer funds and 17th out of 87 in the European Retail category.

 

“Not only have we exceeded our previous overall scores, but for all three disclosing portfolios -CEREIT, CPRF, and Cromwell’s investment portfolio, DPT – we have increased our scores across all categories, placing them well above global and industry peer averages,” said Ms. Young.

“These results would not be possible without a huge team effort and collaboration from our investors, tenants, supply chain partners, and the broader Cromwell team, and we would once again like to share our thanks to everyone involved.”

Cromwell will publish its FY23 ESG report in early December 2023.