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, 4.8-year WALE, and 0.6% portfolio valuation increase in 1H 2024; DPU at 7.05 euro cents, down 9.5% year-over-year due to asset sales and higher finance costs.

• Completed €23 million in divestments in 1H 2024, contributing to €261 million since 2022 at a 14% premium to valuation.

• Outperformed the FTSE SREIT index with a 4.4% total shareholder return in 1H 2024, ranking as the 2nd best performing SREIT.

• Stoneweg’s proposed €280 million acquisition of Cromwell’s European business, CEREIT’s manager, and a 27.79% stake in CEREIT units, with no expected changes to management or strategy.

Financial highlights

• 1H 2024 gross revenue 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%.

• Distributable income was €39.6 million (down 9.5% year-over-year); DPU at 7.05 euro cents.

• NAV per unit at €2.09, down 1.4% from December 2023; unit price at a 35% discount to NAV.

• Annualised distribution yield of 10.1% based on recent unit price.

• Portfolio valuation increased 0.6% in H1 2024, the first like-for-like gain in two years.

Outlook and guidance

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

• Management focuses on maintaining high occupancy, positive rent reversion, and progressing key developments and 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 to continue, targeting MSCI AA ESG rating and GRESB 4 stars.