Republic’s first REIT to raise €200 million

The Republic’s first real estate investment trust (REIT) intends raising €200 million from investors to cash in on opportunities likely to emerge in the commercial property market from the second half of this year.

Green REIT plc formally announced its intention to float on the Dublin and London markets on July 18th and raising “in excess of €200 million” from institutional investors and its own management team.

The company said it plans to assemble a “portfolio of freehold and long leasehold properties consisting primarily of commercial property in Ireland, principally Dublin”, but also in other cities such as Limerick, Galway and Cork.

Its statement said that the current weakness in the commercial property market will allow shareholders to “take advantage of the re-pricing of assets”.

It intends purchasing properties for which there is a demand, mainly offices and industrial premises.

It will be the first REIT set up in the Republic since the passage of this year’s Finance Act paved the way for the establishment of these property investment vehicles here.

REITs are quoted companies that own or operate commercial property. They are not taxed on the rental income as long as they pay 85 per cent of it to their shareholders as a dividend. Investors are taxed on these earnings in the normal way.

REIT shares can be traded in the same way as those issued by any other quoted entity.

Management entity
The firm will be managed by Green Property REIT Ventures Ltd, a company linked to Green Property, the once-listed entity now controlled by its chief executive, Stephen Vernon, who bought it out in 2002 for €1.85 billion.

Greencore chairman Gary Kennedy will take the same role at the property company. Other directors will include Mr Vernon, Jerome Kennedy and Thom Wernink.

Mr Kennedy said Green REIT intended to build a portfolio of assets which should deliver a sustainable income stream and, over time, strong capital returns for shareholders.

The company plans to distribute 85 per cent of its property income to shareholders annually, in line with the requirements of the Irish REIT legislation.