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Cromwell shrugs off takeover threat and continues expansion

Business

The under-siege Brisbane property company, Cromwell Group, has splashed out $87 million to start a European logistics fund.

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Cromwell will buy seven BHL outlets in Italy with a settlement expected in September.

“It is intended that the assets will then form the seed portfolio for a new Cromwell European logistics fund once launched,” the company’s chief investment officer Rob Percy said.

“Logistics is a high-conviction sector that we believe will prove resilient in these difficult times and provide our capital partners with strong potential for outperformance over the medium term.”

The decision comes as Cromwell’s board tries to fend off a bid for control of the company by major shareholder ARA, which has accused it of erratic investment decisions.

Percy said the new fund will be focussed on Italy, France and Germany as well as the Benelux region of Belgium, Netherlands and Luxembourg.

“The demand for logistics assets is likely to continue tom increase supported by long term structural and demographic trends, especially in urban locations where supply is constrained,” Percy said.

The company is also getting close to finalising its data centre fund which caused concern from ARA that it was entering markets where it had no competitive advantage.

It said definitive documentation should be approved and signed by the board soon.

Percy said there had been significant interest in the fund in which it will retain a 20 per cent to 30 per cent stake. The European property fund was expected to launch in the fourth quarter of 2020.

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