Stoneweg European REIT (CWBU) Q2 2024 earnings summary

Executive summary

• Portfolio comprises 107 properties across 10 countries, valued at over €2.2 billion, with 54% logistics and 44% office exposure, and 90% in Western Europe.

• Achieved 93.6% occupancy, 5.2% positive rent reversion, and a 4.8-year WALE in 1H 2024, with a 0.6% increase in portfolio valuation.

• DPU for 1H 2024 was 7.050 euro cents, down 9.5% year-over-year, mainly due to asset sales and higher finance costs.

• Strategic actions included pausing acquisitions, divesting non-strategic assets, and increasing logistics weighting.

• Stoneweg’s proposed acquisition of Cromwell’s European business and CEREIT’s manager, with no expected changes to management or strategy.

Financial highlights

• Gross revenue for 1H 2024 was €106.3 million, down 1.9% year-over-year; NPI was €65.5 million, down 4.4%.

• Like-for-like NPI grew 2.3% year-over-year, driven by new leases and positive rent reversions.

• Income available for distribution was €39.6 million, down 9.5% year-over-year; DPU at 7.050 euro cents.

• NAV per unit at €2.09, with unit price at a 35% discount to NAV and annualised DPU yield of 10%.

• Net gearing at 38.9%, with €63 million in cash and €200 million undrawn facilities.

Outlook and guidance

• European real estate fundamentals expected to improve in H2 2024, supported by ECB rate cuts and stabilising cap rates.

• Management to focus on high occupancy, positive rent reversion, and progressing asset enhancements.

• Plan to complete ~€90 million in remaining non-strategic divestments and increase logistics weighting.

• DPU is expected to remain lower due to bond repricing, but yield remains attractive at over 10%.

• Sustainability initiatives continue, targeting MSCI AA ESG rating and GRESB 4 stars.