REITs poised to snap up prime investment property

One of the main beneficiaries in the recovery of the Irish property market looks set to be the real estate investment trusts (REIT), who are poised to pick up Nama’s best assets.

Green REIT released its interim management statement yesterday which showed that the trust was poised to snap up prime investment property, while the Hibernia REIT announced that it had just paid €60m for two premises in Dublin city centre.

Green REIT has already acquired a portfolio of 16 properties throughout Dublin valued at €335m.

The purchases have been mainly funded through equity purchases with only €74m of debt taken on by the trust.

In March of this year, Green REIT acquired two portfolios of properties, Central Park in a joint venture with LVS II and a second portfolio of commercial property loans from Danske Bank for €22.1m.

Green REIT has 70 tenants in Dublin, including blue chip companies, Merrill Lynch, Tullow Oil and Salesforce, paying an annual rent roll of €25.9m.

The success of its acquisitions allowed it to return to the markets and raise a further €385m to invest in the recovering property sector.

Green REIT’s Stephen Vernon said that the company now has a track record which made raising funds easier.

“The success of our second capital raising, which increased our total equity base to approximately €685m, reflects the market’s confidence in our ability to continue to identify and acquire attractive investment opportunities, both on and off-market,” he said.

Davy analyst Ray Crowley said that the financial clout that Green REIT has acquired means that it is perfectly positioned to capitalise on Nama’s asset sales

“With greater liquidity in Ireland’s commercial real estate investment market – where over €1bn has been transacted year-to-date and with Nama recently flagging its intention to trade a minimum of €250m of assets each quarter into the future – this is an opportune time for Green REIT’s management team to have access to €425m of firepower,” he said.

Hibernia REIT has been flexing its financial muscle, picking up two back to back properties on Hatch Street and Adelaide Road in Dublin 2.

The properties, Hardwicke House and Montague House, are already let to tenants including Prudential International Assurance, Deloitte and Capita, giving an annual rent roll of €2.7m.

The purchase marks the fourth acquisition by Hibernia and brings the total capital invested by the investment trust to€ €208m.

Kevin Nowlan, chief executive of WK Nowlan REIT Management Limited, said that the investment meant that half of all the trusts funds were now in the market. “In less than five months we have now committed over 50% of the funds which shareholders entrusted us,” he said.

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