Friday, 13 Dec 2019

Earnings jump at Green REIT, as it agrees sale to Henderson Park

Green REIT has reported a 21pc jump in its EPRA earnings – that is its underlying net rental profit – to €44.6m in the 12 months to June 30.

This comes as a deal to acquire the group by Henderson Park for €1.34bn was agreed.

Under the terms of the acquisition Green REIT shareholders will receive €1.9135 per share in cash, a 4.9pc premium on the group’s closing price yesterday.

The price agreed is a premium of 24.7pc per share on Green REIT’s closing price of €1.534 on 12 April, the day before it announced it was putting itself up for sale.

In putting the business up for sale, management at the REIT cited the persistent gap between the valuation of its property portfolio and its share price.

Prolific Irish property investors Irish Life and Kennedy Wilson were understood to have progressed to the second round of bidding for the company.

But they have been edged aside by Henderson Park, a mostly London-focused property investment firm set up in 2016 by Nick Weber, a former Goldman Sachs and Mount Kellett employee.

Gary Kennedy, chairman of Green REIT, said: “Following a highly competitive process, the cash offer by Henderson Park to acquire the company represents an attractive outcome for shareholders delivering a premium to the share price prior to the announcement of the sale process and to Green REIT’s Net Asset Value.”

Meanwhile, the group’s performance in the 12 months to June 30 was helped by an increase in its annual rental income to €79.4m, or €83m when income from lettings with terms agreed are included, from €71.7m the prior year.

The value of Green REIT’s portfolio increased by 8pc during the period to €1.5bn, according to full year results from the group.

Profit after tax fell 36pc to €91.8m, however this includes fair value movements on the company’s investment properties.

“This has been another year of growth in our rental income and underlying earnings, with further positive contributions from our development schemes and asset management initiatives to the company’s income base,” Mr Kennedy added.

Green REIT, whose portfolio is predominantly made up of offices, said it has agreed the retail space at One Molesworth Street, at an annual rent of €505,000. This will bring the building to full occupancy, delivering a total rent of €5.85m per year.

Meanwhile, the company’s Building I in Central Park will generate yearly rent of around €3.5m, 13pc ahead of the group’s most recent annual rent projection in February.

Elsewhere, its Bunzl unit at Horizon Logistics Park at Dublin Airport commenced in February and is due for completion early next year, with an annual rent of €1.14m.

Green REIT’s key assets include the Central Park office campus in Leopardstown, Fitzwilliam Hall in Dublin 2, and One Albert Quay in Cork city.

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