Property fund seeking to raise €500m
IPUT seeking finance for investment in range of retail and logistics sites
“Adidas, Boss, Gap, we have seen those names looking to open up stores here”
Property fund IPUT is seeking to raise up to €500 million from institutional backers to invest in retail and logistics over the next 12 months, according to its chief executive, Niall Gaffney.
The regulated investment fund told shareholders this week its total value stood at €1.4 billion at the end of 2014, a gain of 37.1 per cent on 2013. It paid a €41.57 dividend per share, in line with previous payouts to stakeholders.
During 2014, it bought law firm A&L Goodbody’s offices on Dublin’s north quays. On the other side of the Liffey, it purchased One Grand Canal, home to consultancy Accenture, and the nearby Riverside 2 office block. Mr Gaffney said IPUT plans to add further investments this year to bring its total value to about €2 billion. “Over the next 12 months we are aiming to add another €400 million to €500 million and we would see that going into retail and logistics,” he noted.
The firm intends raising the cash from institutional backers such as pension funds, life assurers and sovereign wealth managers. In 2014, German group Allianz put €140 million into the fund, while it also brought British insurer Aviva and Netherlands-based CBRE Global Investors on board.
IPUT believes the next recovery will be in prime retail properties, as consumer confidence returns on the back of an improving jobs market. Mr Gaffney suggested the sector is giving similar signals to those given by office investments two years ago.
The fund owns the Park in Carrickmines in south Dublin and the Pavilion complex in Swords. Mr Gaffney argued there is now limited supply of space, while a number of players are looking to open stores.
“Adidas, Boss, Gap, we have seen those names looking to open up stores here,” he said. “A lot of the big international names say Dublin is in a position where it is going to enter a growth phase.”
Mr Gaffney suggested concerns that falling prices – deflation – will put people off spending are overdone. He argued employment plays a much bigger role in prompting consumers to part with their cash.
IPUT has no debt as it invests its backers’ money. The company focuses on properties that deliver an income as well as a return on the actual sum invested. It paid dividends through the recession of about €40 a share every year.
It looks for premises likely to deliver high yields (annual rent income as a percentage of the total cost). Yields from offices have fallen about 4 per cent from closer to 6 per cent two years ago – one reason it is looking at opportunities in retail.
However, IPUT is also planning to redevelop the old passport office off Molesworth Street. The firm was originally a property-based unit fund trust founded in 1967. Last year, it converted to a regulated Qualifying Investor Alternative Investment Fund and so is now overseen by the Central Bank.