The Straits Trading Company plans to sell part of its Australian industrial portfolio to Australian-listed real estate company Cromwell Property Group.
Under the terms of the deal, Straits Real Estate (SRE), a subsidiary of Straits Trading, will divest a 19.9% equity interest in its industrial portfolio to Cromwell for approximately A$47.6 (S$40.5) million. The selling price is derived from the portfolio’s gross asset value of around $400.1 million less liabilities.
Straits Trading is a conglomerate-investment company with operations and financial interests in resources, property and hospitality while Cromwell is a real estate investment manager with nearly $3.6 billion of assets under management in Australia and New Zealand.
As part of the deal, Cromwell will also purchase Terre Property Partners – manager of assets in the afore-mentioned portfolio – for an initial purchase price $1.7 million, with further deferred compensation based on the platform’s performance. Terre is 40% owned by SRE.
The transactions are part of a strategic partnership that combines Cromwell’s operational expertise and Straits Trading’s institutional strength “to enhance their industrial and logistics platform across Australia”, reads a joint statement.
Straits Trading executive chairman Chew Gek Khim says, “This strategic partnership marks an important milestone in our continued focus on optimising our industrial and logistics portfolio. Cromwell’s established presence and deep operational capabilities in Australia will augment our platform and position us for long-term value creation.”
Cromwell CEO Jonathan Callaghan says, “This initiative reflects our continued progress in repositioning Cromwell as a capital-light, investment manager. By expanding our AUM, integrating a proven management team and partnering with an institutional investor of Straits Trading’s calibre, we’re strengthening our platform and creating new opportunities to partner with capital providers in sectors where we see long-term value."
This collaboration comprises two phases with the above transactions forming Phase 1 which is expected to be concluded by Dec 31. Straits Trading says that the transactions in this phase allow the company to “recycle capital at an opportune time while remaining part of a potentially larger industrial and logistics platform in Australia”.
In a filing with the local bourse, Straits Trading adds that it plans to redeploy the net sales proceeds into real estate opportunities with potentially higher returns as “part of capital recycling to deliver greater value to its shareholders”.
See also: MM2 Asia requests for voluntary trading suspension
For Phase 2, the partners plan to carry out a recapitalisation of the SRE industrial portfolio (shortly after completion of Phase 1) and conclude the exercise in 2026.
For recapitalisation, both parties intend to introduce new investors. The entry into the Phase 2 Recapitalisation is subject to final approval by Straits Trading and is contingent on the fulfilment of certain conditions, including regulatory approval and investor commitments.
In the event that the recapitalisation is not completed by 2026, Straits Trading reserves the right to retain its interest in the portfolio or to sell its remaining interest to any other investors.
Straits Trading will make a further announcement in the event that the Phase 2 recapitalisation takes effect.
SRE’s industrial portfolio comprises seven industrial assets located in key logistics hubs across South Australia and Victoria. Tenants include Coca Cola Europacific Partners, Incitec Pivot and Wengfu. Located in precincts such as Bayswater, Salisbury South and Port Adelaide, the assets enjoy strong connectivity and see resilient occupier demand.
In Aug 2025, Straits Trading reported a loss of $40.8 million for the first half of 2025. On a pro-forma basis that Phase 1 transactions were completed on Dec 31, 2024, the company’s NTA per share as at Dec 2024 will increase to 314.7 cents from 305.7 cents. On the basis that Phase 1 transactions were completed on Jan 1, 2024, loss per share increased to 2.3 cents from 1.6 cents.
Straits Trading’s share price closed at $1.65, a one cent increase.
