Green Reit up 2% as asset value rises

Prime Dublin office rents have remained stable, at €700 per square metre, while office rents in Cork have increased 8% from last year, commercial landlord Green Reit has said.

Shares in the company rose almost 2% despite its profits falling more than 14%, year-on-year, to €45.6m in the six months to the end of December. However, the value of its properties rose 4.1% to €1.48bn.

The company said there is a lot of room for growth in the logistics space, especially in Dublin where 95% of its portfolio value is located.

The company said it has €600m to spend on the development of its property portfolio.

Green Reit wants logistics to comprise more than 20% of its portfolio over the medium-to-longer term as its Horizon Logistics Park in Swords is developed out. Logistics and warehousing space currently comprises 7% of the company's portfolio.

"There continues to be good demand from investors for modern logistics units. However, the sector still comprises only 3% of the total investment market. Over the last six months, there has been yield compression in this sector, with prime yields currently at 5.1% and trending stronger.

"It is anticipated that demand for modern logistics units will continue to grow as a result of the increase in e-commerce in Ireland, the strength of the pharmaceutical industry and overall economic growth," the company said.

Brexit may also present further opportunities, Green Reit said, as would the development of e-commerce facilities to process orders.

A slowdown in technology, globally, could lead to a softening in Dublin office rents and valuation yields. Green Reit owns One Molesworth Street in Dublin, which includes Barclays as tenants, and One Albert Quay in Cork.