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A $110 million fair value boost to Cromwell Property Group's (ASX: CMW) investments has prompted a 59 per cent jump in statutory profit for the first half.
The $227.3 million result was also bolstered by Cromwell's 'invest to manage' strategy, with operating profit rising by 26 per cent to $134.1 million.
Cromwell CEO Paul Weightman describes the result as exceptional.
"Our long-dated balance sheet assets continue to drive operating earnings above our rolling net operating income (NOI) target of 3.0 per cent," he says.
"Our 'Invest to Manage' strategy, which involves investing to acquire or develop assets, creating new funds, selling down to capital partners and then recycling the proceeds also continues to bear fruit.
"In the half year we sold Northpoint Tower and recycled capital into 400 George Street, our LDK Healthcare joint venture and in acquiring the third-party interests in the Cromwell Polish Retail Fund."
The group has also announced the exchange of contracts to sell a 50 per cent interest in 475 Victoria Avenue, Chatswood to a private fund managed by BlackRock Real Estate. Following the sale, the pair will enter into a joint venture relationship to expand the asset.
"Similar to the strategic approach taken with Northpoint the location, high-calibre tenants and development upside position the asset as an attractive investment proposition," says Weightman.
"We will review our existing plans with BlackRock and explore further ways to increase the value of the opportunity.
"The Group has a clear proven strategy, a long-WALE portfolio of balance sheet properties, a $1.2 billion plus value-add development pipeline, a host of 'Invest to Manage' opportunities, a successful and growing business in Singapore and a robust platform and presence in Europe."
CMW shares were down 1 per cent at $1.167 at noon AEDT.
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