How Cromwell’s Industrial Push Is Driving 13.6% AUM Growth
Cromwell Property Group reported a 1.5% rise in operating profit and a 13.6% increase in assets under management, driven by strategic industrial acquisitions and robust portfolio performance.
- Operating profit up 1.5% to $55.9 million
- Group AUM grows 13.6% to $5.0 billion
- Acquisition of 19.9% stake in $472 million industrial portfolio
- Investment portfolio valuation up 3.6% with 97.2% occupancy
- Barton1 office development on track for mid-2027 completion
Strong Half-Year Performance
Cromwell Property Group has delivered a solid financial performance for the half-year ended 31 December 2025, with operating profit increasing by 1.5% to $55.9 million. This growth was underpinned by a resilient investment portfolio that saw valuation gains of $72 million, reflecting both strong leasing activity and improving market conditions.
The Group’s assets under management (AUM) rose 13.6% to $5.0 billion, boosted significantly by the acquisition of an industrial management platform and a 19.9% stake in a $472 million Australian industrial portfolio. This move marks a strategic expansion into the industrial real estate sector, positioning Cromwell to capitalise on growing demand in logistics and warehousing hubs.
Industrial Expansion and Strategic Growth
The acquisition of the industrial portfolio, known as the Cromwell Industrial Partnership, alongside Terre Property Partners’ management platform, adds $567 million in AUM and deep industrial expertise. The portfolio includes seven logistics assets located in key Australian markets such as Bayswater in Victoria and Salisbury South and Port Adelaide in South Australia, with a cap rate of 6.1%.
Complementing this, Cromwell launched the Cromwell Creek Street Investment Trust, targeting an 8% annual distribution yield and a 15% equity internal rate of return over five years. The fund is raising approximately $102 million to acquire a well-located Brisbane CBD office tower, further diversifying Cromwell’s portfolio.
Development and Portfolio Outlook
The Barton1 office development in Canberra remains on schedule for mid-2027 completion, fully pre-leased to a Commonwealth Government tenant on a long-term lease. This project exemplifies Cromwell’s disciplined approach to development amid challenging market conditions, leveraging fixed-price contracts and strong tenant covenants to mitigate risk.
Occupancy across Cromwell’s investment portfolio remains robust at 97.2%, supported by successful leasing campaigns including a lease extension at 400 George Street, Brisbane. The portfolio’s valuation uplift of 3.6% signals stabilising market conditions and growing investor confidence in high-quality real estate assets.
Financial Strength and Distribution Guidance
Cromwell’s balance sheet remains strong, with gearing at a conservative 30.2% and liquidity of $418 million, providing ample capacity for further growth initiatives. The Group reaffirmed its full-year distribution guidance of 3.0 cents per security, maintaining a payout ratio of 71% based on funds from operations.
CEO Jonathan Callaghan emphasised the Group’s momentum, noting that disciplined execution and strategic acquisitions are positioning Cromwell for sustainable long-term growth across office and industrial sectors.
Bottom Line?
Cromwell’s strategic industrial expansion and steady portfolio performance set the stage for continued growth, but investors will watch closely as Phase 2 of the industrial partnership unfolds.
Questions in the middle?
- What are the details and timing of Phase 2 capital partner introductions for the industrial portfolio?
- How will Cromwell manage leasing and occupancy risks amid evolving office market dynamics?
- What impact will the wind-up of the Cromwell Direct Property Fund have on overall portfolio composition?
