SINGAPORE: Cromwell EREIT Management Pte. Ltd., the manager of Cromwell European Real Estate Investment Trust released sustainability report for the financial year ended 31 December 2019, wherein it is reported the Manager achieved all environmental, social, and governance (ESG) targets set by the board, and even surpassed some of them.

The Manager’s Chief Executive Officer, Mr. Simon Garing, commented, “ESG considerations have been at the core of our operations since CEREIT’s IPO as they are indispensable in our work to fulfil our core purpose of providing Unitholders distribution per unit and net asset value per unit growth in the long term. The board and the management team firmly believe that resilient, ethical, and socially responsible business practices are essential to our long-term success. To this end, I am pleased to report that we have integrated ESG standards into the day-to-day management of CEREIT’s portfolio and operations.”

The Manager’s progressive ESG efforts and reporting remain guided by the sustainability framework developed by CEREIT’s sponsor Cromwell Property Group (“Cromwell”). The framework is supported by five core pillars – Economic, Governance, Stakeholders, People, and Environment – which provide a holistic and integrated approach towards managing ESG risks and opportunities and ensure operational consistency.

To instil ownership of all material aspects under each pillar, the board has assigned executives and managers responsibilities for identifying, setting, and achieving the objectives and targets associated with the material aspects under each pillar. All key management personnel have ESG-related KPIs and provide quarterly sustainability performance reports to the board.

Notably, the Manager capped its outperformance against IPO forecasts for two years by growing distributable income and distribution per unit by 42.6% and 8.8% year-on-year (“y-o-y”) to €96.9 million and 4.08 Euro cents in FY 2019, exceeding the corresponding forecasts1 by 38.0% and 1.5%, respectively.

It also increased CEREIT’s portfolio occupancy rate to 93.2% as at 31 December 2019, up 2.4 percentage points (“p.p.”) compared to the rate as at 31 December 2018 and 0.6 p.p. above the IPO forecast.

Tenant-customer satisfaction improved in 2019 as well, with the percentage satisfied as occupiers rising by 5 p.p. y-o-y to 69% and the percentage satisfied with the property manager’s asset management performance rising by 5 p.p. y-o-y to 76%.

As previously reported, the Manager achieved a 43% y-o-y increase in CEREIT’s GRESB score, which rose from 47 in 2018 to 67 in 2019. It retained a perfect score in the ‘Management’ aspect of the GRESB Real Estate Assessment and registered improvements in five of the six other assessment aspects, while also outperforming its ‘Diversified – Office / Industrial (Europe)’ peer group in five of the seven aspects.

In addition, CEREIT was awarded an “A” grade in the GRESB Public Disclosure Assessment, higher than its comparison group average grade of “B” and the global average of “C”.

The Manager is committed to actively improve the operational performance and reduce the environmental impact of CEREIT’s properties. Over the course of FY 2019, 11 CEREIT properties attained BREEAM certifications and one property achieved LEED3 certification. All CEREIT assets also obtained Energy Performance Certificates where legally required. CEREIT also purchased only renewable energy in Denmark, Germany and the Netherlands, as well as only low-carbon-intensive energy in France and Finland for all assets over which it maintains operational control.

The Manager is also in the process of obtaining BREEAM-in-use certificates for another seven properties over the course of 2020.

The Manager’s ESG-led operational approach is especially important in the context of the ongoing COVID-19 pandemic, which has greatly disrupted the global business environment. In steering CEREIT through the impact of COVID-19, the Manager applies Cromwell’s sustainability framework, which provides a structured, responsible, and balanced pathway to sustained business success.

The Manager also adopted Cromwell’s business continuity framework and further augmented it with relevant policies and procedures consistent with the Monetary Authority of Singapore’s Business Continuity Management Guidelines, ensuring smooth operations during the current “circuit breaker” restrictions in Singapore.

“We are fortunate to have benefited from the early resilience planning, risk management measures, as well as protocols implemented by Cromwell across our global operations, and continue to operate at close-tofull potential within the constraints of applicable COVID-19 containment measures,” added Mr. Garing.

“CEREIT’s diversification across asset classes, geographies, tenant-customers, and tenant-customer trade sectors is designed to minimise risks and provide resilience against any short-term economic shocks. Our immediate focus is on the well-being of our tenant-customers and employees as we continue working to mitigate the pandemic’s impact on CEREIT’s revenue and operations.

“The board and management team are focused on preserving unitholder value, ensuring appropriate levels of cash, and stewarding operations. There are many lessons to be learned from the world’s COVID-19 experience and we will look to further enhance our emergency planning and accelerate digital transformation across our operations, as well as fortify our portfolio against climate risks and enhance our stakeholder engagement programmes.”