Green REIT nears €383m Cosgrave ‘Sapphire’ portfolio buy and signing up to a €200m RCF

Green REIT is on schedule to close the circa €383m acquisition of the Cosgrave portfolio in early October and close its first revolving credit facility (RCF) of up to €200m, leaving the Irish group with a further €322m of headroom to fund its development programme and further opportunistic investments.

Green reit logoJust under three months ago, on 11 June, Green REIT announced it had signed contracts to acquire a six-strong office and retail portfolio totalling over 648,788 sq ft in Dublin – among the assets three prime office buildings including the iconic George’s Quay – for a purchase price of €375m, rising to €383m including estimated acquisition costs.

The protracted closure of the Cosgrave property portfolio – also dubbed the Sapphire portfolio – has been due to a €250m lawsuit issued by Peter, Joseph and Michael Cosgrave against Ulster Bank over alleged mis-sold interest rate swaps.

Secondly, Cosgrave Property Group has been negotiating the discounted payoff of the estimated €600m of loans against its property portfolio, including a proportion of loans securing the Sapphire portfolio.

The Irish Independent reported earlier today that the €250m lawsuit had been dropped, while Cosgrave Property Group’s negotiations with its creditor group are expected to be finalised by early October, paving the way for the Green REIT’s €383m acquisition, including costs.

Davidson Kempner, the US hedge fund, acquired around €370m of gross liabilities – including loans and mark-to-market swap liabilities – from Ulster Bank which spun the positions in the €715m Project Button loan portfolio.

The debt was part of a wider banking syndicate, with a further circa €126m stake owned by Blackstone, which had acquired the loans from Permanent TSB, while around €54m was also owned by NAMA, ING Bank and ACC.

However, for Green REIT the Sapphire portfolio is expected to be acquired on an all-cash basis using cash resources raised from its €400m equity raising in May.  

In addition, Green REIT has acquired 13-17 Dawson Street in Dublin 2 from joint receivers on behalf of NAMA for €23.7m, including acquisition costs, in what is considered a prime redevelopment opportunity.  The acquisition will be funded with €10m in equity and the balance in debt.

Following the completion of the two post reporting period deals, Green REIT will have invested €748m in equity and debt since its IPO in July last year.

Green REIT is also in advanced discussions with banks for a RCF of between €100m to €200m.

The total equity raised from shareholders of €685m net of costs has now been fully invested or committed.  

The RCF will fund further acquisitions and development initiatives to be implemented by the company, with approximately €150m earmarked for Green REIT’s development programme across 13-17 Dawson Street, 4-5 Harcourt Road, 30-33 Molesworth Street, 84-93 Mount Street, Central Park and Horizon Business Park.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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