Cromwell European REIT - Annual Report 2021

CEO INTERVIEW Simon Garing CEO AND EXECUTIVE DIRECTOR 1. OVER THE LAST TWO YEARS THE MANAGER, HAS FOCUSED EFFORTS TO PIVOT CEREIT’S PORTFOLIO TO LOGISTICS. HOW IS THIS STRATEGY BENEFITTING CEREIT’S UNITHOLDERS? We have made good progress in CEREIT’s pivot towards the light industrial / logistics sector, having completed around ~€344 million in light industrial / logistics acquisitions since the beginning of FY 2020 in the UK, the Netherlands, Germany, Italy, the Czech Republic and Slovakia at a 6.5% blended NOI yield. In FY 2021 alone, €212.6 million in acquisitions were completed at a 6.3% blended NOI yield. These accretive acquisitions were well-supported by capital markets, with €365 million of new bond issuances, inaugural perpetual securities and ordinary Units in FY 2021, yielding a blended cost of funds of 4 - 5%. Our appreciation goes to CEREIT investors, for recognising our strategy to achieve majority allocation to light industrial / logistics sector. On the back of this repositioning, in FY 2021 CEREIT’s Units have outperformed the FTSE ST-REIT total return index by +8.6% in one year and +15.5% over the past three years. CEREIT’s Total Shareholder Return (TSR) for FY 2021 was 13.5%. CEREIT’s Units now trade at only a slight discount to NAV (with current Unit price weakness mainly due to rising interest rates and heightened geopolitical risks), heading in the right direction to the premiums that other logistics S-REITs are traded at. As the Manager of CEREIT, we do recognise that size and scale still provide relative advantage and we know that we still have some way to go in terms of achieving better Unit trading liquidity. 2. CEREIT HAS A MEDIUM-TERM ~€250 MILLION DEVELOPMENT PIPELINE IN NEW LOGISTICS AND OFFICE REFURBISHMENT. WOULD YOU ELABORATE ON YOUR DEVELOPMENT PLANS? HOW WILL THIS DEVELOPMENT PIPELINE BENEFIT THE UNITHOLDERS? CEREIT is progressing on ~€250 million of redevelopment / new developments (excluding the longer-dated Parc Des Docks 10 hectares estate in Paris). The developments that we are undertaking for CEREIT are on predominantly freehold land held by CEREIT. They will unlock value and provide a high accretive yield on cost, because the projects are undertaken on CEREIT’s own balance sheet. Unitholders stand to receive the full benefits directly, once the projects are completed. The redevelopment of Via Nervesa 21 in Milan into a 10,000 sqm BREEAM Platinum Grade A office space for an estimated €25 million is currently in the strip-out works phase. When completed towards the end of 2023, the property is expected to provide long-term income and value upside, based on the robust Milan Grade A office market. In terms of greenfield developments, the Manager is commencing the first such project in FY 2022 for the two-phase development of logistics warehouses on a 39,380 sqm plot of land in CEREIT’s Nove Mesto ONE FOCUS ON STRENGTHS PIVOT TO LOGISTICS 10