Maiden Irish REIT raises €100m above capital raising target

Green REIT, which launched just over three weeks ago to capitalise on the nascent recovery in the Ireland’s commercial property market, raised €300m from an international institutional investor base, overshooting the original €200m target.

An additional €10m was raised within the management team – Stephen Vernon, Pat Gunne, Mark Munro, Paul Culhane and Jim McKenna – with shares priced a €1 per share.

J & E Davy and JP Morgan Securities were joint bookrunners.

Gunne and Vernon are non-executive directors of Green REIT and co-founders of its investment manager, Green Property REIT Ventures, solely established to invest the Irish REIT’s capital.

Vernon said: “The significant level of investor interest re-affirms our belief that there is a compelling opportunity within certain sectors of the Irish commercial property market for a well-capitalised investor with experienced management and long-term investment objectives.”

Green REIT’s strategy is to create an Irish property portfolio consisting primarily of commercial property which delivers income and capital growth through opportunistic investments, active property management and prudent use of debt finance.

When Green REIT was announced on 26 June, many in the wider property market were both surprised and optimistic that the legislation had been utilised so swiftly.

There was a broad acceptance that the REIT structure, which attracts a broader-than-just real estate investor base, would enable new investors to benefit from the very incrementally manifesting Irish recovery story.

And it is so incremental. Capital values in Ireland’s commercial property markets have been battered in the last five-and-a-half years, by as much as 67.4% to the end of March, according to IPD’s Ireland Quarterly Property Index.

Within this powerful, unabaiting descent of property values has been a mixed set of fortunes within sectors, segments and regional geographies.

Green REIT, chaired by Gary Kennedy, is the first of possibly many to seek to capitalise on the more optimitisc corners of this recovering property market.

In a blaze of publicity three weeks ago, Kennedy said: “The establishment of Ireland’s first REIT is positive for the Irish commercial property market, providing stability with long-term capital, and represents a significant commitment to Ireland.”

This evening there is even greater gusto from Kennedy.

He said: “To have successfully raised over €300m is a strong endorsement of investors’ confidence in…. the opportunity evident in the sectors of the Irish commercial property market that Green REIT is targeting.

“The high level of demand… is positive for the Irish commercial property sector.”

Green REIT’s investment focus – across office, industrial, retail assets  as well as residential and multifamily – will comprise: prime and good quality secondary commercial property in Ireland, principally Dublin, and to a lesser extent opportunistic investments in Cork, Galway and Limerick.

For further details, please see CoStar News’ earlier report here.

Ireland’s commercial property market is on the brink of immense structural change.

The government’s Minstry of Finance has accelerated the wind-up of one of the country’s largest failed banks, Anglo Irish, now IBRC, which could trigger the potential sale of up to €11bn Irish commercial property loans.

Even if these loans are not sold through the joint special servicers, through KPMG, the transfer of this debt will feed through to NAMA, which in turn, will organise the loan or underlying property disposals.

Green REIT is a different vehicle for which investors can access that stock which has a lower cost of capital than the majority of private equity funds which have so far won most of the assets up for grabs.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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