Green REIT acquires EUR127.6m commercial portfolio from Danske Bank Ireland
Green REIT, the Irish property investment company, has exchanged contracts to acquire a portfolio of commercial real estate assets from Danske Bank Ireland for EUR127.6m (net of acquisition costs).
The initial yield on the investment properties in excess of 8.5 per cent.
This marks the first acquisition undertaken by the company since its listing in July in which it raised equity of EUR310m to invest in the Irish commercial property market. The acquisition will be funded from existing cash resources.
The portfolio comprises 10 properties, eight of which are in Dublin. The portfolio is a mix of prime and good secondary assets, totals over 708,000 sq ft and is currently 84 per cent let with a weighting towards the retail (37 per cent) and office (29 per cent) sectors.
The properties currently generate a net rental income of EUR10.6m from a strong base of 65 tenants, including Bank of Ireland, Homebase, Lidl, TK Maxx, Woodies, Park Rite and Kuehne & Nagel. The average weighted unexpired lease term across the portfolio is in excess of nine years which is due to the number of long leases in situ from quality covenants. The portfolio also includes a development site of approximately 112 acres adjacent to Dublin airport. This site has the potential for a logistics development of up to one million sq ft.
Stephen Vernon, Green REIT Plc, says: "Our first transaction since we successfully raised EUR310m and listed in July is consistent with our stated strategy of investing in primarily Dublin based commercial property.
"The acquisition of this significant, diversified portfolio, with strong covenants, not only provides excellent cashflow generation, but also presents the opportunity to drive rental income and enhance capital value through active asset management. This transaction confirms that liquidity in the market has risen dramatically, as we had expected. We continue to identify and evaluate a number of other attractive assets which meet our investment criteria."
Pat Gunne, managing director, Green Property Ventures, the investment manager, says: "This first deployment of the capital we raised in July into such a high quality portfolio underpins our belief that providing long-term capital is both positive for the Irish commercial property market and allows us to achieve our objective of delivering attractive returns for our shareholders. The solid rental income base is key to us achieving the dividend model we outlined to our investors."
Grant Thornton and DTZ acted for Danske Bank. Jones Lang LaSalle acted for Green REIT.