Green REIT to raise over €200m to purchase Irish commercial property

Green REIT (real estate investment trust) is looking to raise over €200m from Irish and British investors with the aim of putting together “a portfolio of freehold and long leasehold properties consisting primarily of commercial property in Ireland, principally Dublin”. 

The company’s management team, led by Stephen Vernon and Pat Gunne, say they are targeting returns of between 10%-15% each year. The other two directors of Green REIT are Gary Kennedy and Jerome Kennedy.

The Government introduced legislation in last December’s budget to attract REITs into the Irish market. Speaking at the launch of Green REIT, Finance Minister Michael Noonan said: “We welcome the announcement this morning of the launch of Green REIT plc — Ireland’s first REIT following the Budget 2013 announcement and introduction of legislation in the Finance Act.

“REITs will provide stable, long-term capital investment into the commercial property sector in Ireland. The establishment of Green REIT and the rising level of activity and interest in the commercial property market is a further indication that the range of initiatives this Government has introduced are contributing to the stabilisation and recovery of the property sector in Ireland.”

Irish commercial property prices have fallen about 60% from the peak of the market in 2006. The most common type of investment was highly leveraged property funds, which typically focused on one development. When the property market crashed, investors were left nursing heavy losses.

There is now a shortage of hi-spec office developments in Dublin. REITs are seen as an attractive way for investors to gain exposure to a broad base of development potential.

The company said it was looking at prime and good quality secondary commercial property in Dublin with the valuation per asset ranging between €10m and €50m.

“The recently introduced REIT legislation in Ireland, together with the management team’s strong track record of value creation for shareholders, have enabled us to create an exciting investment vehicle which is well placed to capitalise on the many opportunities we see emerging in the Irish commercial property market, both now and as the cycle continues to evolve,” Mr Vernon said.

“We look forward to using our experience and industry relationships to create sustainable and long-term value for shareholders.” Source: Irish Examiner