Irish property investor Green REIT is preparing for a slowdown in the Irish market as returns cool off.
Chief executive Pat Gunne said he was cautious about the Irish market as fears of Brexit and the Irish election, which took place on 26 February, added to the uncertainty.
Gunne said returns of more than 25% in recent years “clearly aren’t sustainable”, adding that plans within the company to cope with any stagnation in Ireland were already under way, with a focus on risk-adjusted returns rather than absolute returns.
“We are not relying on yield compression. The bigger part of performance will come through rental activity and the development pipeline,” said Gunne. He added that Green would manage the assets in the portfolio with an emphasis on leasing activity.
Rental income rose by more than 50% in the six months ended 31 December 2015 to €24.2m (£19.1m), while profits dipped by 10% to €67.1m.
Gunne said the company was now looking to de-risk its portfolio. He said Green would reduce its development exposure from 25% to 15% over the coming months and would seek to reduce its debt from 35% to 25%.
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