Pan-European investor M7 Real Estate has returned to the Irish acquisitions trail with the purchase of Swords Enterprise Park in north Dublin.
While the price paid has not been disclosed, it is understood to be have been slightly less than the €11.5 million which had been sought for the scheme when it was offered to the market in November last year by agent Harvey as part of the wider sale for €48 million of property Icav the Novelty Portfolio.
Apart from the Swords units, the portfolio had comprised of two other assets, located in Cloverhill Industrial Estate, Clondalkin, Dublin 22 (guide price €17 million) and Mervue Business & Technology Park in Galway (guide price €19.5 million). Taken together the offering made up about 447,000sq ft of accommodation, generating income of about €3.15 million, representing an overall net initial yield of 6 per cent. The Galway portion of the portfolio was recently acquired by French investor Corum Asset Management, for about €19.4 million.
In the case of Swords Enterprise Park, M7′s Irish subsidiary M7 Ireland has secured ownership of a 79,000sq ft scheme comprising 61 industrial/office units arranged over eight blocks. The development overlooks the M1 motorway and offers occupiers easy access to the M50, Dublin Port Tunnel and Dublin Airport.
At the time of being offered to the market, the occupancy level at Swords Enterprise Park stood at 93 per cent with rents coming in below market levels, giving the purchaser scope to drive income through new lettings, lease renewals and rent reviews. Rental income from the asset was sitting at approximately €916,500 per annum when it went sale agreed in February, reflecting a net initial yield of 8.13 per cent. Historic arrears were transferred to the purchaser at nil value, giving them an opportunity to bolster their return further should they be successful in recovering some of these.
Commenting on the sale, Siobhan Convery of Harvey said: “The investment fundamentals of Swords Enterprise Park were excellent. There was a great reversionary story to be realised on the rents over the short term which really appealed to the investor market. There was a confidence that with the deployment of a clever and proficient asset management strategy, which the likes of M7 are adept at doing, this investment could drive excellent returns and be a real success.”
John Murnaghan, managing director of M7 Ireland, said: “Swords Enterprise Park has always had exceptionally high occupancy from a diversified tenant base and fits well with our investment strategy. We have identified a number of options to add value and quickly deployed our asset management team who have already brought new occupiers to the park and driven income performance to over 9 per cent. We are continually on the lookout for assets like Swords that offer similar strong fundamentals.”
M7′s acquisition of Swords Enterprise Park brings its overall Irish portfolio to 26 assets extending to just under 1,241,000sq ft, primarily in the industrial and logistics space. M7 operates across 14 countries. It manages a portfolio of about 580 retail, office and industrial assets comprising 47.3 million sq ft with a value of about €5.8 billion.
