Stephen Vernon’s and Pat Gunne’s Green REIT announced the €127.6m (£109m) purchase of a 10-strong portfolio of assets from Danske Bank Ireland alongside its maiden interim results.
The cash deal is the debut transaction by Ireland’s first-ever real estate investment trust since it raised €310m through a listing on the London and Irish stock exchanges in July, and reflects an initial yield of 8.5%.
In its results for the third quarter Green REIT also announced that it was buying two more Dublin properties for a combined value of €50.7m, taking the total capital invested by the firm, in the period from 1 July to 28 October, to €178m.
These purchases are in line with the company’s strategy to build a commercial property portfolio and to deliver income and capital growth through opportunistic investments, active property management and prudent use of debt finance.
A statement from Green REIT added that it “continues to identify and evaluate a range of investment opportunities in order to acquire additional assets that meet its stated investment criteria and that can deliver attractive returns for shareholders”.
The 708,000 sq ft portfolio is a mix of prime and good secondary assets weighted towards shops (37%) and offices (29%) and includes eight properties in Dublin. It is currently 84% let to 65 tenants including Bank of Ireland, Homebase, Lidl, TK Maxx, Woodies, Park Rite and Kuehne & Nagel and generates a net rental income of €10.6m.
The portfolio, which has an average weighted unexpired lease term in excess of nine years, also includes a development site of around 112 acres adjacent to Dublin airport which has the potential for a logistics development of up to 1m sq ft.
Separately from the portfolio, the additional Dublin properties are the EBS Building Society Headquarters on Burlington Road and Independent Newspapers Print Works at CityWest Campus, Dublin 24. Both transactions are off-market transactions.
Green REIT will pay vendor Hardwicke €46.5m for the Burlington Road property, which is a 81,000 sq ft Grade-A office building in Dublin 4, reflecting an initial net yield of 8.6%.
It is currently let to EBS Building Society – a subsidiary of Allied Irish Banks – with a minimum of three years remaining on the lease.
The Independent Newspapers Print Works building is the most modern printing facility in Ireland currently let to Independent News and Media Ireland. The 65,000 sq ft property was acquired for €4.23m with an initial net yield of 9.1%. It is on a site of 4.4 acres that overlooks the N7 area of CityWest.
Vernon said: “The acquisition of these Grade-A buildings in Dublin brings our total invested capital to €178m and demonstrates our ability to source high-quality investments both on and off-market. Our acquired portfolio is consistent with our stated strategy and we look forward to investing further in the Irish commercial property market and delivering attractive returns for our shareholders.”
Gunne added: “Our ability to identity and acquire attractive assets reflects the strength and breadth of our team and also our extensive network of industry relationships. Being seen as a low execution risk counterparty is a key part of our strategy in building the REIT portfolio.”
Grant Thornton and DTZ acted for Danske Bank. Jones Lang LaSalle acted for Green REIT.
bridget.oconnell@estatesgazette.com
