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.
Just 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.