Yew Grove acquires buildings in Dundalk and Citywest for €19m

Property group Yew Grove Reit has exchanged contracts for the purchase of an industrial building in Dundalk and two adjoining office properties in Citywest, Dublin, for €19 million.

In Dundalk the company has lined up a deal on Tanola House on Coes Road, which is a recently-constructed high bay industrial building of 86,451sq ft over two adjoining blocks.

The property has a 12.5m eaves height, 120 car parking spaces and is tenanted by a US multinational under two leases which together have a weighted average unexpired lease term (WAULT) to first break of about 8.4 years and a WAULT to expiry of 18.4 years.

Tanola House was acquired for about €8 million, with a current annual rent of €601,000 stepping up in about four years across both leases to €631,000, representing a net initial yield of 6.9 per cent and increasing to 7.3 per cent at the step-up.

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The company has also exchanged contracts to purchase Blocks E&F, Citywest Dublin, for €11 million.

The property has two adjoining office blocks of 45,972sq ft with 165 car parking spaces, and is fully tenanted by three multinational tenants paying a current annual rent of €984,000.

This represents a net initial yield of 8.2 per cent with a potential reversionary yield of 9.2 per cent. The property has a WAULT of four years to first break and 6.4 years to expiry.

On completion of these transactions Yew Grove will have a portfolio of 24 properties with a gross asset value of about €162 million, which will rise to an estimated €172 million on completion of the forward-funding transaction in Athlone. It will also have an annualised rent roll of €12.9 million.

The purchases were funded from the proceeds of the company’s recent equity issue and debt capacity from its revolving credit facility.

Tenants

Yew Grove said it has a “differentiated and diverse portfolio” of well-tenanted commercial office and industrial properties situated outside of the Dublin central business district.

The company’s geographic target market continues to combine properties with tenants with “strong credit quality and attractive purchase yields and rising rents”.

Yew Grove CEO Jonathan Laredo said the company remained focused on taking advantage of valuable opportunities in the market.

“We are pleased with the acquisitions in Dundalk and Citywest. The new properties are reversionary, and will benefit from Yew Grove’s asset-management capabilities, which should generate significant value for both tenants and our shareholders.

“Having again demonstrated our ability to effectively and rapidly deploy capital, we remain focused on the significant and valuable opportunities in today’s market to acquire well built, well tenanted assets.”