Trinity Biotech lab and manufacturing unit guiding at €10.5m

Sale of Nasdaq-listed company's Bray facility offers purchaser net initial yield of 6.8%

Trinity Biotech’s Bray R&D laboratory and manufacturing facility was built in 2006

Trinity Biotech’s Bray R&D laboratory and manufacturing facility was built in 2006

 

With more and more private and institutional investors targeting the Life Sciences sector since the unwelcome arrival of the Covid-19 pandemic, the sale of Trinity Biotech’s R&D laboratory and manufacturing facility at its headquarters in Bray, Co Wicklow, is expected to see strong interest.

The property, which is being offered to the market by agent Knight Frank at a guide price of €10.5 million, offers the prospective buyer a net initial yield of 6.8 per cent (assuming standard 9.96 per cent acquisition costs). The figure does not account for any benefit that might be accrued from the € 4.3 million capital allowance attached to the asset.

Located at the heart of the IDA Business Park on Bray’s Southern Cross Road, Block 2 is a modern two-storey high-tech laboratory production facility extending to 3,977sq m (42,817sq ft) with surface car-parking spaces and a secure service yard to warehouse/cold storage section.

Developed and completed in 2006,the building is of steel-frame construction with a double-glazed curtain wall façade under an insulated flat roof. Internally, the property has been fitted out to a high specification to comply with pharmaceutical regulatory requirements. It comprises a mixture of high-tech laboratories and production areas, a staff canteen, open-plan and cellular office accommodation and full-height refrigerated warehouse storage.

Well connected

The IDA Business Park itself is strategically-located adjacent to the M11/M50 motorway providing ready access to Dublin city centre, Dublin Port and Dublin Airport. The campus is well connected by public transport also with numerous Dublin Bus routes operating along the Southern Cross Road. A feeder bus provides frequent links to Bray Dart station.

The proposed sale of Trinity Biotech’s Bray facility comes just one week on from the publication by the company of its results for 2020 in which it reported total revenues of $102 million (€85.6 million) versus $90.4 million (€76.7 million) in 2019, an increase of 12.8 per cent year on year. Trinity Biotech’s gross margin for the year was 47.6 per cent compared with 42.2 per cent in 2019. Profit after tax (before the impact of once-off items and non-cash financial income) came to $15.7 million (€13.3 million) in 2020 compared to a reported loss of $4.1 million (€3.4 million) in 2019.

Trinity Biotech is an Irish-founded and headquartered company quoted on the Nasdaq exchange, and with facilities spanning Europe, America and Canada.

The company specialises in the development, manufacture and marketing of diagnostic test kits used to detect infectious diseases, sexually-transmitted diseases, autoimmune disorders, cardiac arrest, haemoglobin disorders, and in the detection, monitoring and control of diabetes. Trinity Biotech is also a significant provider of raw materials to the life sciences industry.

The company’s central manufacturing site in Bray is its largest and specialises in the delivery of numerous products including its biggest-selling HIV Unigold product. It also makes the more recent Covid-19 related viral transport media product for transporting Covid-19 test swabs to laboratories.

Recent disposal

While the high-tech and precision laboratory facilities required in Life Sciences have in the past tended to be lumped in with the more basic warehouses of the wider industrial sector, investors have, in recent years, come to appreciate and value the difference between the two.

Indeed, the increasing popularity of the Life Sciences sector was firmly in evidence with the recent disposal by Legal & General of five buildings at Cambridge Science Park outside London for £100 million (€116 million). With more than 20 bids received, the opportunity had nearly €2 billion euro in capital chasing before being sold for over 50 per cent above the guide set by Knight Frank’s UK capital markets team.

Commenting on the sale of Trinity Biotech’s Bray facility, Ross Fogarty of Knight Frank’s Dublin office said: “This opportunity, while smaller in scale, is perfectly placed to be a ready-made and well-established bolt-on to any such portfolio. Trinity Biotech’s longstanding roots in Bray, coupled with the important fact that it is the Irish-based company which owns many of the group’s patent rights, is likely to play very positively to potential investors. Across the group’s manufacturing activity, R&D, intellectual property holdings and its corporate tax status, Trinity Biotech’s Bray operations are mission-critical for the company’s continued operations.

“The mission-critical role of Block 2 in Trinity Biotech’s Bray headquarters and its long, secure weighted average unexpired lease term, is likely to underpin strong investor sentiment for this opportunity.”