Dunloe Ewart has agreed to acquire two property portfolios for £84 million in its first expansion since Dunloe House acquired Ewart last March.
It is a significant development for the group as it provides it with a badly needed stream of rental income to cover running expenses. The first portfolio consists of 22 properties, located in England, Scotland, Wales and Northern Ireland which have been purchased from two British companies for £62.5 million sterling (£72.7 million). The second consists of two investment properties, occupied by the OPW, in Harcourt Street, Dublin, for which it is paying £11 million. The first portfolio has been acquired from Sydney & London Properties Ltd and Gross Hill Properties Ltd for £50 million sterling cash and £12.5 million in new Dunloe Ewart shares to be issued at a price in the range of 27.5p sterling and 31p sterling. The shareholders in the two companies, which include the Australia FIA Insurance company, have agreed to keep the new Dunloe Ewart shares for a period of 12 months. Dunloe Ewart is buying the properties at net asset value. The deal which has to be approved by Dunloe shareholders, at an extraordinary general meeting, is geared at 80 per cent. There is a rental income of £5.3 million sterling from the portfolio. This puts it on a yield of 8.5 per cent. The deal will "throw up a surplus of £800,000 to £1 million cash per annum", group managing director Mr Philip Byrne told The Irish Times. "We needed to increase our rental income to cover all overheads and interest expenditure and there is good value in the UK," he added.
There are "very strong covenants" including Sainsbury, Pricewater houseCoopers and the British government in the portfolio, he said. The portfolio consists of nine properties located in Scotland, 10 in England, one in Wales and two in Northern Ireland. The largest, accounting for £14.5 million sterling, is the Castle Shopping Centre in Co Antrim. Dunloe will now be carrying out a revaluation of the properties before the deal is put to the shareholders.
The Harcourt Street properties are on a 25-year lease and are understood to have been purchased from Mr Jack McKinney.
