Green Reit revalues its portfolio upwards

Property investment company Green Reit reported a pre-tax profit of €43 million for its first year of operation this morning, as it re-valued its portfolio upwards by some €36 million.

In the 12 months to June 30th 2014, Green Reit reported total passing rents of €28.5 million, an investment income yield of 7 per cent, and a dividend of 0.92 cent. The real estate investment trust (Reit) said that it has a further € 322 million to invest into new opportunities.

Gary Kennedy, chairman of Green Reit, said that the company's first twelve months have been characterised by momentum, "in which we have successfully assembled our current portfolio of property assets".

“ The real estate market is recovering at a steady pace alongside the general improvement in the Irish economy, but particularly in Dublin where 90 per cent of our assets are located by value. We are well below our target loan to value ratio of 35 per cent and therefore have headroom of a further € 322 million to invest in both new opportunities and our existing assets.”

To date, Green Reit has allocated capital of €748 million, raised from its IPO in July 2013 and a secondary offering in May 2014. In addition to the reit’s €28.5 million rent roll, the property investment company also disclosed this morning that it has revalued its portfolio upwards by the order of 14.2 per cent, or €36 million.

Green Reit is also seeking to leverate its equity with debt, noting that discussions are “well progressed with lenders on additional debt financing”.

“This additional debt finance will allow us to take advantage of further opportunities that might arise, at a relatively low cost, without seeking further funds from shareholders. We use prudent levels of leverage to enhance shareholder returns, while always being mindful of the need to protect against downside valuation risk,” the company said.

Green Reit is cautiously optimistic on the outlook for the commercial property market, noting that with “ supply being well below trend and demand, we expect further growth in Dublin office rents”. The company also said that “retail at the prime end has bottomed and is beginning to turn”.

In a note, Davy Stockbrokers said that the results and prospects demonstrate that Green REIT is “in excellent shape and highlights its first-mover advantage in a recovering market”.