Property investor Green Reit expects to see businesses moving to the Republic following Brexit to begin signing leases on premises by the end of the year.
The total value of the real estate investment trust’s properties rose 5.4 per cent to €1.31 billion in the final six months of last year as its rent roll increased and it continued to develop office and industrial property.
Net asset value, measured on a basis set out by the European Public Real Estate Association (EPRA), rose to €1.582 billion before the payment of a final dividend in November, the company said.
Stephen Vernon, who chairs the trust's investment manager Green Property Reit Ventures, said both the firm itself and the Republic's property market should benefit once the UK begins its exit from the EU in earnest this year.
Banks and other financial services firms that want to keep some operations within the EU are known to be considering moves to Dublin amongst other EU cities.
Mr Vernon said the extent to which this was likely to happen would become clearer in the coming months as the UK invoked article 50 of the European treaties and formally begins to leave the EU. “By the end of the year you will probably see some leases signed in relation to Brexit.”
Extra demand
Chief executive
Pat Gunne
indicated that Green had the capacity to take on extra demand for offices in Dublin if it materialised post-Brexit. “In the office sector, a likely beneficiary of Brexit, we have the potential to develop an additional 400,000sq ft at Central
Park
[in
Leopardstown
in south Dublin].”
It said earnings per share on an EPRA basis rose 37 per cent to 2.6 cents as annual rent across 21 properties rose 6.2 per cent to €65.1 million.
Green Reit and rival Hibernia Reit launched initial public offerings in 2013 to raise cash to buy commercial property and take advantage of depressed prices after the crisis.
During 2016, Green Reit completed the letting of its first office development at 32 Molesworth Street in central Dublin, with financial firm Maples Fund Services having agreed in December to rent the entire 2,973sq m (32,000sq ft) property for €1.65 million a year.
The trust said three other office schemes it was working on were “progressing well, with an increased level of interest from prospective tenants”.
Good momentum
Green Reit said development at Horizon Logistics Park beside Dublin Airport, where it bought an additional 164 acres in December for €12.3 million, was showing “good momentum”, with logistics being the strongest performing real estate sector in
Ireland
in 2016. The company completed a lease agreement on a 4,125sq m warehouse unit with
DHL
last year, while it also agreed a pre-letting for new space to be built for Kuehne+Nagel, a global transport and logistics group.
“We remain confident that this development pipeline will enhance both the net asset value of the company and its rental income, thereby feeding into a strengthening dividend from our rental profits in the future,” Green Reit said.
