Cromwell’s $87M Chatswood Stake Sale to Cut Gearing by 3%
Cromwell Property Group has agreed to sell its 50% stake in a prime Chatswood property for $87 million, aiming to boost FY2026 earnings and reduce debt levels.
- Sale of 50% interest in 475 Victoria Avenue, Chatswood
- Transaction valued at approximately $87 million
- Positive impact on FY2026 earnings forecast
- Reduction in group gearing by around 3%
- Realised property IRR of over 8.5% since 2006 acquisition
Strategic Asset Disposal
Cromwell Property Group has announced a conditional agreement to sell its half stake in the Chatswood joint venture property located at 475 Victoria Avenue, NSW. The deal, valued at approximately $87 million, is expected to complete in the first quarter of FY2026, subject to standard conditions including Foreign Investment Review Board (FIRB) approval and financing arrangements.
Financial Implications and Portfolio Impact
The sale price reflects a 9% discount to the most recent independent valuation, which is currently in draft form. Despite this, the transaction is forecasted to have a positive effect on Cromwell’s earnings for FY2026 and will reduce the Group’s gearing ratio by about 3%, signaling a healthier balance sheet and improved financial flexibility.
Long-Term Investment Performance
Since acquiring the asset in 2006 for $110 million and subsequently selling 50% to a joint venture partner in 2020 for $120 million, Cromwell has achieved a property internal rate of return (IRR) exceeding 8.5% over the investment period. This demonstrates the Group’s ability to generate steady returns from its property portfolio through strategic asset management and timing of disposals.
Market Context and Future Outlook
The decision to exit this joint venture aligns with Cromwell’s broader portfolio management strategy, potentially freeing up capital for reinvestment or debt reduction. The property market in Chatswood remains competitive, and while the sale price is slightly below valuation, the transaction provides immediate liquidity and reduces exposure to a single asset.
Investors will be watching closely for the completion of the sale and the subsequent impact on Cromwell’s financial statements, as well as any announcements regarding the redeployment of capital or changes in investment focus.
Bottom Line?
Cromwell’s Chatswood exit marks a pivotal step in portfolio reshaping, with FY2026 earnings and gearing set for a meaningful boost.
Questions in the middle?
- Will Cromwell reinvest proceeds into new acquisitions or prioritize debt reduction?
- How might the 9% valuation discount influence investor sentiment or future asset sales?
- What are the implications for Cromwell’s exposure to the NSW commercial property market post-sale?
