Property investment company Green Reit said on Monday that it has appointed JP Morgan Cazenove to initiate a process for the sale of the company or its portfolio of assets. The move comes as the company, which has a €1.5 billion portfolio of prime office and logistics asset, bemoans the performance of the company's share price.
Gary Kennedy, chairman of Green Reit, said that despite Green Reit's prime office and logistics portfolios of scale, underpinned by strong tenants and a supportive market and macro environment, the company's share price has been "subject to a material and persistent structural discount to its net asset value per share for over three years now".
“Our primary responsibility as a board is to deliver shareholder value. Given this imperative and following detailed analysis and due consideration, we have decided to focus on the sale of the company or its portfolio of assets. It is the board’s view that this is demonstrably in the best interests of our shareholders,” he said.
As lead financial adviser, J.P. Morgan Cazenove will review any proposals made for the company or its portfolio of assets. CBRE has been appointed as property adviser to the company, Davy has been appointed as joint financial adviser and corporate broker, and Arthur Cox has been appointed as the company’s legal adviser.
The co-founders of Green Reit, Stephen Vernon and Pat Gunne, have said that they won't make an offer to acquire the company, nor will they otherwise directly or indirectly participate in any third party offer to acquire the company.
In a statement, Green Reit said that it “reserves the right to alter or terminate the proposed sales process at any time and in such case will make an announcement as appropriate”.
Green’s portfolio includes a number of buildings at Horizon Logistics Park in north Dublin, as well as One Molesworth Street in Dublin’s city centre and the Central Park complex in Sandyford.
In a note, Philip O’Sullivan, analyst with Investec, said that both Green Reit and Hibernia Reit have been trading at an “anomalous discount” to the book value of their assets, despite repeated disposals of buildings at or ahead of what they were in the accounts at, and no lack of buying interest from institutional investors looking to gain exposure to Dublin’s booming commercial property market. He expects that there will be “ample interest” in the sale.
Green Reit shares closed at € 1.534 on Friday, with a market capitalisation of some €1.1 billion.