Stoneweg European REIT (CWBU) Q3 2024 earnings summary

Executive summary

• Achieved 7.0% NPI growth in Q3 2024, driven by redevelopments and resilient 93.9% portfolio occupancy, with logistics/light industrial now 54% of the portfolio and WALE at 4.7 years.

• Office NPI rose 13.8% and logistics/light industrial NPI up 6.7% year-over-year, with strong leasing and tenant retention.

• Fitch Ratings revised outlook to Positive, affirming BBB- rating, citing improved portfolio quality and stable financial metrics.

• Outperformed FTSE S-REIT index by 22% in TSR for 9M 2024, driven by strategy execution and ECB rate cuts.

• Stoneweg's proposed €280 million acquisition of the sponsor and manager is expected to enhance resources and support without changing strategy or governance.

Financial highlights

• 3Q 2024 gross revenue was €53.9 million (+0.6% YoY), NPI €34.5 million (+7.0% YoY), distributable income €20.7 million (-7.8% YoY); 9M 2024 distributable income was €60.4 million (-8.9% YoY).

• Like-for-like NPI growth for 9M 2024 was 4.4%, with office at +7.7% and logistics/light industrial at +2.2%.

• NAV per unit at €2.05 as of 30 September 2024, with unit price at a 20% discount to NAV.

• Net gearing at 39.7%, within the Board's 35-40% policy range; interest coverage ratio at 3.6x; all-in interest rate at 3.16%.

• 87.6% of debt hedged or fixed, with €51 million cash and €192 million undrawn RCF providing ample liquidity.

Outlook and guidance

• ECB rate cuts, improved credit conditions, and incoming sponsor support expected to stabilise operating and valuation conditions.

• Focus on refinancing the November 2025 bond, issuing long-term debt, and optimizing capital structure.

• Priorities include maintaining high occupancy, driving positive rent reversion, and progressing ESG initiatives.

• Asset values expected to stabilize over the next 12 months, with no significant revaluation gains anticipated.

• Targeting further Fitch Ratings upgrade and increasing logistics weighting via asset recycling and acquisitions.