Green REIT has confirmed the €311.5m purchase price of the soon-to-close Central Park acquisition from NAMA and approximate terms of the breakdown of the deal with joint venture partner and financier, PIMCO, and Kennedy Wilson.
In the Irish REITs interim results published this morning, Green REIT reconfirmed its preferred bidders status on Central Park which CoStar News broke on 31 January which was the day NAMA confirmed the winner to all final bidders.
Green REIT has confirmed this morning that it is acquiring the 691,223 sq ft investment component and development land within the Central Park portfolio in an approximate 50-50 joint venture with PIMCO, which is also financing the Irish REITs stake.
The joint venture is paying NAMA €210m for the investment component and a further circa €20m for the development land. Green REIT is understood to be paying around €120m for its stake, comprised of €45m equity and €75m debt, which will be provided by PIMCO.
PIMCO is paying around €110m for the balance of the €230m investment and development land component of Central Park for in an undisclosed mix of equity and debt, implying that the joint venture is split approximately 52% and 48% between Green REIT and PIMCO, respectively.
The net initial yield on the leased space only of the investment component of Central Park is 7.3%, while the forecast yield when fully let is 7.8%.
As a result, it is implied that Kennedy Wilson is acquiring the remaining residential component of Central Park for around €82m in an undisclosed mix of equity and debt capital.
Green REIT, in its interim results this morning, also announced that it is close to completing the off-market acquisition of five Dublin city centre properties – known as the D2 Portfolio – from Danske Bank Ireland for €23m, including costs.
In addition, in late 2013 Green REIT acquired a property on Mount Street, Dublin 2 for €6.35m taking the two purchases to six properties for €28.35m at a net initial yield of 10.5%.
Green REIT said the D2 Portfolio comprises five properties with c. 69,000 sq. ft. in two locations, Molesworth Street and Ormond Quay. The properties are leased at relatively low rents providing the opportunity for rental growth with some of the existing leases due to expire between 2014 and 2016. There is also a significant redevelopment opportunity.
Following the closure these six properties and the Central Park acquisition, Green REIT will have a remaining €41.0m of equity to invest from its original €299.6m raised, net of expenses, plus up to €86.6m in headroom to raise debt finance at stated maximum leverage thresholds.
Last October, Green REIT won its maiden property portfolio – Project Arc – which was comprised of 10 commercial properties from Danske Bank Ireland for €127.6m, net, with an initial yield on the investment properties in excess of 8.5%.
Gary Kennedy, chairman of Green REIT, said in the interim results statement this morning: “The strengthening macroeconomic backdrop in Ireland, particularly in Dublin, and supportive property market conditions should lead to growth in rental and capital values in commercial property as we move through 2014.
“The Board has a confident outlook and the Company’s property portfolio holds many opportunities to be exploited. The Board expects continued success in deploying the Company’s capital to build the property portfolio with properties which satisfy the investment and financing criteria set out in the prospectus.”
Green REITs net asset value at 31 December 2013 was €299.7m, or 96.7 cent per share.