Brexit is building into a ‘sweet spot’ for Green Reit
The future looks bright for Irish property group but there are clouds on the horizon
Green Reit chairman Gary Kennedy, director Stephen Vernon and chief executive Pat Gunne. Photograph: Nick Bradshaw
Although a cloud of Brexit uncertainty hangs over many sectors in the State, commercial property’s prospects appear bright, for now anyway. Green Reit’s results for the 12 months to the end of June illustrated this clearly yesterday.
The property investor and developer is focused on offices and logistics, mainly in Dublin, although it has one significant asset in Cork. It is one of a few players in its sector that is benefiting as some businesses opt to shift operations out of the UK and into the State.
Recently it signed up British bank Barclays as tenant in one of its higher-profile properties, 1 Molesworth Street in central Dublin. According to Stephen Vernon, executive chairman of Green Property Reit Ventures, it is in talks with other potential tenants for the half of the building that it has not let to the UK lender.
Similarly it has signed up a luxury goods retailer for a unit in Horizon Logistics Park, which is strategically located close to Dublin Airport. While Green has yet to name the company, it appears that this deal is also partly a result of Brexit.
Its annual contracted rent is now close to €73 million. Its properties in central Dublin and Leopardstown, where it is building a 9,000sq m office block on spec, mean that it is likely to pick up yet more business as the Brexit exodus continues.
Speaking after the results yesterday, Vernon pointed out that the Brexit effect and the strength of the Irish economy generally were combining to drive its performance. Pat Gunne, chief executive of Green Property Reit Ventures, acknowledged that the company was very much in a “sweet spot”.
Nevertheless, there may be a few clouds on the horizon. One of the elements that is driving economic growth is foreign direct investment. That is partly down to our 12.5 per cent corporate tax rate and a general tax regime that multinationals regard as attractive.
The weekend’s Ecofin meeting and the European Commission’s ruling on the Apple tax deal indicate that the State may not have it all its own was in this area forever. Both Gunne and Vernon agree, but as they point out, there is a “long, hard road” to be travelled before the EU reaches any deal at all on tax.