Asset Management

Cromwell operates a 'Tenant is King' philosophy when it comes to asset management, because we believe that good relationships are the foundation of a strong and sustainable business.

The primary goal of our Nordic asset management team is to build long term, mutually beneficial relationships with our tenant customers.  This enables Cromwell to understand our tenants’ needs and flexibly meet their requirements. With approximately 39 assets in the Nordics, we are able to accommodate tenants in many different parts of Sweden, Denmark, Finland and Norway.

Our asset managers also set bespoke annual business plans for all assets and continuously review progress of every asset, in line with our investment strategy. Budgets, forecasts, plans and performance reports are prepared in a transparent and consistent manner to ensure all assets are managed efficiently and that we effectively maximise investment performance through:

  • Rent and service charge collection;
  • Report on rent arrears, bailiff cases, rent indexation;
  • Maintenance programmes and budgets;
  • Lease compliance;
  • Handover of units at lease start and finish;
  • Information reporting to Asset Management; and
  • Insurance.

European High Income Fund lettings, Denmark

The European High Income (EHI) Fund is a pan-European fund invested in multi-let light industrial property, with assets in Denmark and other European countries. With the Fund coming to the end of its life in 2015, agreements were reached with our investors and banking partners to extend its life and concurrently refinance the portfolio. 

At the time, the Danish portion of the EHI portfolio had a 28% vacancy and low weighted average lease expiry, making it a difficult proposition to negotiate a new loan facility with a lending partner. The local asset management team in Denmark undertook an active asset management strategy to improve the weighted average lease expiry and income stability of the portfolio.  

This included agreeing lease renewals with the Fund’s largest tenant, Nilfisk-Advance, on more than 20,000 sq m of space at two different assets. The team’s strong relationship with the tenant enabled them to quickly establish the company’s long term intention to remain in occupation and ensure the renewal process ran smoothly. 

Furthermore, in response to market demand, the team changed the leasing strategy on some assets, splitting larger warehouse units into smaller units appealing to a different occupier segment. As a result of this activity, the void on the portfolio was reduced by around 8% in an 18 month period. 

The EHI Danish portfolio was subsequently refinanced with a DKK 305 million facility underwritten by SEB, to match the new maturity date for the Fund.

Kabelverket 2, Älvsjö

Kabelverket 2, Älvsjö, is a 69,000 sq m office and industrial asset, constructed in 1995 and located to the south west of Stockholm. 

The asset was acquired in 2008 and formed part of the V+ Nordic 2 fund which invests in secondary office and industrial assets in Sweden and Norway. 

Following a strategic relocation by Ericsson in 2011, the 22,000 sq m office building was 100% vacant. Cromwell’s Swedish asset management team implemented a repositioning strategy which included targeted refurbishment of units and a full rebranding of the asset to Älvsjö 360, a multi-tenant business park providing flexible space to suit a variety of tenant uses. 

Following lettings to several institutional grade tenants, including Gemalto, Anticemex and Netsize IPX, the void on the office space was reduced from 100% in 2012 to 0% in 2015.  

A re-zoning and change of use strategy on the industrial space was implemented, with zoning planning approval granted for 85,000 sq m of residential building rights.   

A two phase disposal plan of the residential development site and office complex was executed in 2015, achieving a net profit in excess of 50%.

Stattena 7, Helsingborg

Stattena 7, Helsingborg, is a 6,300 sq m retail asset comprising three units, located in Helsingborg. 

The asset formed part of a bank workout portfolio of assets located in Sweden, France and Belgium, which came under management in 2012. 

At the time of appointment, of the three units, a 770 sq m unit was vacant and there was a short lease expiry occurring with the food retailer occupying one of the other units. 

The Swedish asset management team had a clear objective to stabilise the asset and improve the weighted average lease expiry and net operating income, in order for the bank to recover maximum value.  

Two five year lease extensions were agreed with the existing tenants and a new 10 year lease with BDO was agreed on the vacant unit. 

The asset was disposed of in 2015 to a local property company, at a price representing an increase in value of circa 20%. Over the hold period, the weighted average lease expiry improved from less than one year to greater than five years and net operating income increased by 27%

Riihitontuntie 1, Vantaa

Riihitontuntie 1 is a 14,500 sq m building comprising two floors of retail space and a warehouse occupied by a number of retailers. It is located in Varisto, which is an important retail hub for home furnishing and furniture businesses in Helsinki and has excellent transport links with one of the city’s major ring roads.  

The asset forms part of European Commercial Real Estate Limited (ECREL), a portfolio of industrial and mixed commercial assets which was originally a workout mandate. 

When the Finnish asset management team assumed management responsibility for the asset, it had a 33% vacancy rate and a weighted average lease expiry of 2.8 years. The property needed active asset management to reposition it as a Core+ asset.  

The team negotiated with the main tenant, Kruunukaluste, on a lease extension and relocation to the first floor, which filled the void on that space. A new 10 year lease was signed with Tokmanni Oy, the largest discount retailer in Finland, who commenced occupation after Cromwell delivered a fit-out exactly to their required specification and schedule. 

Having decreased its vacancy from 33% to 5% and increased its weighted average lease expiry from 2.8 to 5 years, the asset’s value has increased by 60%.