Irish commercial property landlord Yew Grove Reit tentatively agrees to sell for €127.8m 

The members of the Yew Grove board said they consider the terms of the offer to be 'fair and reasonable'. 

Irish commercial property landlord Yew Grove Reit has received a takeover approach from Canadian property owner Slate Office Reit.

Yew Grove has agreed on the terms of a potential cash offer of around €127.8m and said it will recommend the deal to its shareholders if and when the cash offer is formally made. 

Yew Grove — which owns offices and industrial units in Dublin and counts multinationals and government agencies amongst its tenants — said that along with its borrowings, the deal values the company at €177.4m.

The members of the Yew Grove board said they consider the terms of the offer to be "fair and reasonable". 

All of its directors will vote in favour of the deal.

Davy said the deal reflects “wider issues for Irish real estate”.

“Yew Grove made significant efforts to raise equity in the market to build scale but ultimately was unable to do so,” said analyst Colin Grant.

“A principal stumbling block was the high rate of stamp duty of 7.5% on Irish commercial real estate that had to be absorbed by investors on any acquisition growth. 

"Irish Reit legislation also has significant restrictions on growth,” he said.

"Green Reit sold itself when opportunities for growth were reduced, impacting its valuation.

"Hibernia Reit traded at a wide discount to net tangible assets as its growth profile slowed.

"Ireland’s low corporation tax rate attracts foreign direct investment, but it has one of the highest rates of commercial stamp duty and most onerous restrictions on Reits," Mr Grant said.