Cromwell Forges €500 million European Development Deal with Bouygues

Cromwell Property Group has entered into a strategic partnership with Linkcity, a subsidiary of global construction company Bouygues Construction, to invest in the roll-out of a portfolio of logistics and light industrial assets in Central and Eastern Europe.

The portfolio is targeting an eventual gross asset value of €500 million ($792 million) and assets representing more than 25 per cent of the portfolio by value have already been identified.

The recently listed in Singapore Cromwell European Real Estate Investment Trust will gain first right of refusal on the ownership of any of the newly built facilities.

The first asset is an 8,000sq m logistics building. Located just over 100 kilometres east of Prague, in the Czech Republic, it is already 88 per cent pre-let and due to complete in the third quarter 2018.

The larger second and third assets, covering a combined 180,000 sqm, are currently also seeking pre-let commitments.

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Bouygues affiliate companies, Linkcity and VCES, will be responsible for the project development, design and construction of the portfolio, while Cromwell will source investment funding and subsequently provide asset management services upon the completion of each project.

Bouygues Construction is a global player in construction, with operations in more than 80 countries. Linkcity is the development arm of Bouygues Construction focusing on the design, construction, financing and maintenance of commercial real estate in eight countries of Western and Central Europe and Morocco.

Cromwell manages €4 billion of real estate assets and investment capacity across its funds and mandates, with approximately 260 assets and 3,100 tenants. It has over 200 staff on the continent.

“We are delighted to partner with an experienced developer of the calibre of Bouygues to create a portfolio of premium logistics and light industrial assets that are already in demand from transport and ecommerce related occupiers,” Cromwell’s managing director for Europe Mark McLaughlin said.

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Cromwell chief capital officer Simon Garing said the real estate investor and manager has identified a significant investment opportunity in Central and Eastern Europe where it believes there will be a range of future economic, infrastructure and other growth opportunities.

“This partnership is another step forward for our funds management business. It is also an endorsement of our ability to offer international capital partners with investment opportunities in key sectors across Europe,” Garing said.

Czech Republic chief executive David Labardin said that the partnership is a “great opportunity to combine our development expertise in international, Czech, and Slovak markets with a strong investor partner who has an excellent track record of managing assets across Europe.”

As part of its growth strategy Bouygues will explore further opportunities to work with Cromwell throughout its Linkcity network in other European countries.