Green Reit ‘pleased’ with sale process of €1.5bn company

Trading update reveals 10% increase in rents and favourable market conditions

 Green Reit’s site at  Molesworth and Dawson Street: the company reported that contracted annual rent is now up to €79.4 million. Photograph: Cyril Byrne

Green Reit’s site at Molesworth and Dawson Street: the company reported that contracted annual rent is now up to €79.4 million. Photograph: Cyril Byrne

 

Property investment company Green Reit said on Monday that it is “pleased” with how the sale of the company is progressing, as it reported a 10 per cent increased in annual rents.

Back in April, the board of the company, which has a € 1.5 billion portfolio of prime office and logistics asset, agreed to put it on the market, as it bemoaned the performance of the company’s share price.

However, on Monday, Green Reit chairman Gary Kennedy said the group is pleased with how the sale process is progressing and the level of interest expressed to date.

“We will provide a further update to shareholders as and when appropriate,” he said.

Elsewhere, the company reported that contracted annual rent is now up to €79.4 million, or €83.3 million when lettings from lease deals with terms agreed are included. This represents an increase of 10 per cent on the last disclosed figure as of end-December 2018. New lettings meanwhile, were 7 per cent ahead of the estimated rental value, “further illustration of the favourable market conditions in which the company operates,” Mr Kennedy said.

The company reported a vacancy rate of 5 per cent in the period from January 1st, with one new letting signed and terms agreed on a further two lettings at George’s Quay Estate, which will bring it to full occupancy, with additional annual rent of €1.8 million. These lettings will lead to a reduction in annual void costs of approximately €0.4 million, Green Reit said.

Retail space

The company has also agreed terms for the retail space at One Molesworth Street, at an annual rent of €505,000, which will bring the building to full occupancy, delivering a total rent of €5.85 million a year.

“The leasing success achieved to date in 2019 demonstrates the high quality of our portfolio and the very supportive backdrop of the market, which in quarter one of 2019 witnessed a new record level of take-up in the Dublin office market. Combined with the sustained low interest-rate environment, the operating environment remains strong across both the occupier and capital markets,” Mr Kennedy said.

Green Reit succeeded in doubling the rent paid at some locations as part of rent reviews; prior to end-2018 for example, rent for the Maldron Hotel in Tallaght was €300,000, but has now increased to €600,000 a year. Similarly, insurance company Allied World is paying rent of €400,000 for its space at George’s Quay Plaza, up from €200,000 previously.