DUNLOE House, the property company controlled by Dublin solicitor, Mr Noel Smyth, has paid £11.1 million for Santry Holding Company, which owns eight industrial units in north Dublin.
The deal will see the owner of Santry Holding Company, Mr Brendan McDonald, pay £1 million for 4.4 million Dunloe shares - equivalent to 5.4 per cent of the enlarged share capital. Mr McDonald, who paid 22.73p per share for his Dunloe shares compared to the market price of 24.5p, has a put option where he can sell the shares to Mr Smyth for £850,000 between October and December next year.
Mr McDonald is chairman of the Dimpco electrical distribution company and is also a 9 per cent shareholder in Irish Food Processors, the company that emerged from the final restructuring of Goodman International.
Dunloe chief executive, Mr Stewart Harrington, said that, apart from the £1 million injection from Mr McDonald, the balance of the £11.1 million acquisition would be funded through debt. Dunloe intends to quickly dispose of most of the units, which are sited on the Airways Industrial Estate, and has already received approaches from a number of investors interested in units.
Mr Harrington said that because the industrial units had substantial capital allowances, they were attractive to private investors. "There is a shortage of good tax-driven investments and that shortage will become pronounced the closer we come to next April," said Mr Harrington.
The short-term nature of this investment by Dunloe indicates that the main priority is to make a quick capital gain.
All of the units are currently let to Forfas at an annual rent of £853,000, producing an annual yield of 7.2 per cent. Mr Harrington said that three of the units were subject to a current rent review with the remainder cue for a review next year.
This is the single biggest deal by Dunloe since Mr Smyth acquired effective control of the company from Mr Ben Dunne. Mr Harrington said that Dunloe was currently involved in talks on another acquisition but would not give any further details.
