Green REIT — Ireland’s first real estate investment trust — has posted pre-tax profits of €121,000 [£100,644] just days away from clinching a €310m [£257m] deal to buy a commercial complex in south Dublin.
Established in June last year with a €301m [£250m] London Stock Exchange floatation, the company said it had invested €191m [£158m] of capital to the end of December. Its property portfolio now amounts to 905,000sq ft, with 84 per cent located in Dublin. The estate has an occupancy rate of 88 per cent and rental revenue topped €1.7m [£1.4m] for the six months to the end of December.
Gary Kennedy is Green REIT’s chairman. “Having effectively deployed €214m [£177m] of equity in a relatively short period, the company still has the financial capacity to take advantage of further attractive investment opportunities,” he said, referring to the two deals his company has lined up since January. The first is for the €23m [£19m] acquisition of five Dublin city centre properties. In a second joint venture Green and US real estate investor, Kennedy Wilson, have been named preferred bidders for a high-profile development in Central Park, Dublin.
Their €310m bid to buy the Leopardstown complex trumped offers from private equity firms Blackstone and Lone Star, both of which offered between €300m and €310m [£249m and £257m]. Green’s bid was also 24 per cent more than the €250m [£207m] guide price sought by the National Asset Management Agency when it put Central Park up for sale in early November.
Green REIT and Kennedy Wilson have already agreed to concentrate on different parts of the Central Park property — the biggest so far put on the market Nama — and which produces an overall rental income of €17.97m [£14.9m]. That is set to increase to €19.32m [£16m] when a number of rent-free periods expire.
The investment company intends to take control of the development’s five existing office blocks with long-standing tenants Vodafone, Bank of America Merrill Lynch, Tullow Oil and Salesforce. Kennedy Wilson, however, is believed to be solely interested in the residential element, consisting of 272 apartments.
Originally developed and managed by Treasury Holdings, the company was wound up last year following a legal wrangle with Nama and KBC Bank Ireland. There is scope to develop a further 700,000sq ft of office space in three blocks at the site, something Green has confirmed it is interested in taking up.
Galway developer John Lally’s Devano Developments is responsible for the apartment complex. That company is not in receivership, but Nama is managing most of Mr Lally’s bank loans.
In its profit’s statement, Green REIT said that the strengthening macro-economic backdrop in Ireland, particularly in Dublin, and supportive property market conditions should lead to growth in rental and capital values in commercial property during 2014.
And in a separate announcement, Kennedy Wilson confirmed it will use some of the £750m [£623m] from its planned launch on the London Stock Exchange to invest in “distressed” properties in the Irish Republic. It will also invest in “opportunistic and distressed real estate in the UK and Spain”.
