Cromwell jumps 3.8% as it sells Polish retail fund on a stellar day for real estate

Cromwell Property Group (ASX:CMW) has jumped 3.85% to 40.5cps on the back of news it’s selling its Polish retail fund.

Star Capital Finance (SCF) – a Czech entity – has bought the Cromwell Polish Retail Fund (CPRF) for A$465M as Cromwell seeks to “simplify” its operational structure.

The transaction has been settled, passing across the line in Europe overnight. Much of Cromwell’s ‘simplification’ strategy is simply just to divest non-core assets.

The company will use the proceeds to pay off and re-jig its debt.

This isn’t the first time Cromwells pawned off some of its Polish assets. In February, the company sold a 50% stake in had in a JV also dealing with Polish retail assets for $69M.

Today’s sale reflects a far larger divestment.

That brings Cromwell’s total asset sales in recent history to A$1B as the company builds itself a fortress in challenging time for the commercial property sector.

Likely also lifting Cromwell shares on the ASX on Thursday is that the real estate sector is up 2.73%, leading the pack, after US inflation came in tame and without any nasty surprises.

The implication is that rate cuts will come this year, though, the market keeps swaying back and forth like a reed in the wind on that front, caught seemingly forever betwixt hope and despair.

“The completion of this sale, and subsequent debt repayment, significantly simplifies our business, bringing us closer to our goal of being a capital-light fund manager,” Cromwell CEO Jonathan Callaghan said.

“The simplification of the Group’s business model will allow us to focus on our core fund and asset management skills to drive long-term securityholder value from growth initiatives locally when market timing is conducive.”

CMW last traded at 40.5cps.

Note: an earlier version of this article incorrectly cited an AUD figure of $645M for the sale. The correct amount is A$465M.