Green Reit to sell off mixed-use €169m portfolio

A mixed portfolio of commercial properties assembled by Green Reit is expected to sell for more than €168.7 million. It is being offered for sale from today through agents JLL. The investment will show a initial yield of 6.6 per cent.

Four of the six properties are in Dublin and range from the mixed use Arena Centre in Tallaght to the Ormond office building fronting the river Liffey in the city centre; another office investment, Classon House in Dundrum, and a car park in Parnell Street. Bidding on the four assets will be accepted on an individual basis or as a portfolio format to allow maximum flexibility.

The remaining two investments, due to be sold together, are Globe Retail Park in Naas and the Parkway Retail Park in Limerick. The Glas Collection comprises over 69,677sq m (750,000sq ft) of commercial space across more than 58 commercial properties (excluding the car park and 63 apartments in Tallaght) with a total passing rent of €11.5 million per annum. There is a mix of lease lengths with an overall “weighted average unexpired lease term” of about nine years.

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Globe Retail Park in Naas

Pat Gunne, chief executive of Green Property Reit Ventures, said they were bringing the range of properties to the market as part of their strategy to maintain their intended total gearing level below 25 per cent. "We recently acquired full control of Central Park and announced that we would be making a number of asset disposals in 2016 to achieve that objective."

John Moran, managing director and head of investments in JLL, said they expected significant levels of interest from domestic and international investors in the individual properties as well as in the entire collection given the diversified nature of the portfolio in Europe's fastest growing economy.

The centrepiece of the portfolio is the multi-storey Arena Centre consisting of five retail units, four retail warehouses, three office blocks, a residential complex with 63 apartments, leisure facility and a 119-bedroom hotel, all built between 2006 and 2008.

The Arena has a guide price of in excess of €65 million, reflecting a net yield of 6.8 per cent and a rent roll of €4.6 million. The complex offers investors a secure long-term cash flow with a weighted average lease term of 10.2 years. Bank of Ireland, Woodies, Lidl and the Delata Hotel Group account for 80 per cent of the rental income and all are on leases with upwards-only reviews. Bank of Ireland recently demonstrated its long-term commitment by switching its break option from 2018 to 2023 and agreeing to a two-year break penalty.

JLL is guiding €17 million for the Ormond Building close to the Four Courts at Ormond Quay. The five-storey over basement building extends to 3,486 sq m (37,526 sq ft) with a rent roll of €1.2 million with almost 60 per cent of it coming from Dublin City Council and Regus. The weighted average lease will run for another 8.3 years and the initial yield for the new owner is 6.51 per cent.

Even more valuable is Classon House in Dundrum Business Park which has a guide price of €22 million. The rent roll of around €15 million is expected to strengthen in line with the projected rise in suburban rents this year to €323 per sq m (€30 per sq ft). As things stand the yield is 5.5 per cent.

The grade A office block has 6,940sq m (74,700sq ft) and is laid out as 27 own-door business suites with 144 car parking spaces. Car Trawler contributes about 69 per cent of the rental income.

The multi-storey Parnell Car Park, alongside a multi-screen cinema, has 503 spaces and is producing a rental income of €700,000. JLL is quoting €11.2 million for the facility which also includes a number of food outlets. The initial yield is 6 per cent.

The Globe Retail Park in Naas has a guide price of €26 million while the Parkway in Limerick is expected to make in excess of €27.5 million. The Globe is producing a rental income of €1.7million from eight traders while Parkway has a rent roll of €2.02 million from eight stores and a restaurant.