Property investor Green Reit will limit itself to "opportunistic" acquisitions now it has spent the money raised from the markets since its launch last year.
The Dublin-listed real estate investment trust published its first full-year accounts yesterday showing that the values of the properties it bought since its launch in July 2013 rose by 14 per cent.
The trust has spent or committed close to €750 million on building its portfolio. Executive chairman Stephen Vernon said yesterday that, as it is still well below its target debt-to-equity ratio of 35 per cent, this leaves it with headroom for a further €322 million. "We'll use 50 per cent of that to play out our development programme and the other half will be used for opportunistic acquisitions that could arise," he said.
Mr Vernon and his colleagues signalled that the trust's focus will switch focus to management rather than acquisition now that it has completed the bulk of its initial investment work. Pat Gunne, chief executive of Green Property Reit Ventures, the trust's investment manager, said that most of the "heavy lifting" had been done since its launched last year.
“We had a view when we started that we would get this to a billion euro reit and we’re close to doing that,” he said.
Mr Gunne said its focus now would be on managing the assets it has acquired, fulfilling its development programme and raising the extra debt.
The properties acquired by Green Reit since last year include the Central Park complex in Sandyford, Dublin, whose tenants include Vodafone Ireland, where it also has 7.4 acres of development land, and a building at the junction of Dawson and Molesworth streets in the centre of the capital, which has been tipped as a redevelopment opportunity.
Gary Kennedy, chairman of Green Reit, said the first year has been characterised by momentum, "in which we have successfully assembled our current portfolio".
“The real-estate market is recovering at a steady pace alongside the general improvement in the Irish economy, but particularly in Dublin where 90 per cent of our assets are located by value.”
To date, Green Reit has allocated capital of €748 million, raised from its flotation in July 2013 and a secondary offering last May. In addition to the reit’s €28.5 million rent roll, the company also disclosed that it has revalued its portfolio upwards by the order of 14.2 per cent, or €36 million.
Debt financing
Green Reit is also seeking to leverage its equity with debt, noting that discussions are “well progressed with lenders on additional debt financing”.
“This additional debt finance will allow us to take advantage of further opportunities . . . at a relatively low cost, without seeking further funds from shareholders. We use prudent levels of leverage to enhance shareholder returns, while always being mindful of the need to protect against downside valuation risk,” the company said.
Green Reit is cautiously optimistic on the outlook for the commercial property market, noting that with “ supply being well below trend and demand, we expect further growth in Dublin office rents”.
