Yew Grove eyes further share sales within year of IPO

Yew Grove Reit, a new Irish real-estate investment trust (reit), aims to raise additional equity within the next year as it proves its ability to invest money raised in its €75 million initial public offering this week, according to its chief executive.

"If we invest the money well and, more importantly, if the shares perform, I would hope so," said Jonathan Laredo, chief executive of the trust, which will begin trading on Friday on the junior Dublin and London markets, when asked by The Irish Times if the company planned to raise additional cash in the next 12 months.

Yew Grove’s IPO is at the bottom end of the €75 million to €100 million range originally targeted by Mr Laredo and his team. The chief executive said that the small size of the equity-raise had precluded many typical reit investors, while the deal also occurred against the backdrop of some overseas property markets being viewed as near a peak.

Compelling investment

Mr Laredo insisted that this is not the case in Ireland and that the trust's focus on office and industrial assets let to State bodies, IDA Ireland and foreign direct investment (FDI) companies is a compelling investment case in a strong economy. Geographically, it is looking at Dublin property outside the city centre, as well as buildings in major regional cities and towns and IDA business and technology parks.

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Yew Grove chairman Barry O'Dowd, who recently stepped down as a senior IDA executive, said the outlook for Irish FDI remains positive as multinationals prepare for Brexit, in spite of challenges posed by recent US tax reforms and European Union tax harmonisation efforts.

The founding managers of the funds – Jonathan Laredo, Michael Gibbons and Charles Peach – are all executives of UK-based Peak Capital Partners, which set up a fund, Yew Tree Investments, to buy Irish property in the wake of the property crash.

Shares

Ten buildings in that fund – valued at €25.9 million – have been rolled into Yew Grove. Excluding debt attached to the properties, the Yew Tree Investment fund investors have received €21.5 million of shares in the reit.

The IPO has raised €53.5 million of fresh cash. Most of that could be used up if the management team completes deals in the pipeline. It is in talks to buy five properties with a combined value of about €44.3 million.

Mr Laredo said he has “no doubt” the company will be able to raise additional equity and build a portfolio of between €300 million and €500 million over the next three years “provided we perform”.

Management will hold a 6.5 per cent stake in the Reit as it floats, with other investors including AIB, Royal London, and Invesco.