Profits rise after buyout of portfolio

THE £46 million takeover of part of Irish Life's property portfolio last year has turned out to be a bumper investment for Treasury Holdings and its British partners in the acquisition, Jermyn Investments.

According to full year results from Jermyn, the 10 month contribution from Castle Market Holdings the Treasury Jermyn joint venture company for the Irish Life property acquisition was a major factor in a fourfold increase in its profits to £1.07 million sterling.

Jermyn chairman Mr Ray Horney said that Jermyn had invested £8.25 million sterling in Castle Market Holdings at the end of February 1995 and that the net income from the company for the 10 month period was £457,000.

Mr Horney described his return 6.54 per cent a year as satisfactory", especially as it does not take any account of a rent review for the Marks & Spencer store in Cork, which is effective from July 1995. Prior to the rent review, M&S was paying around £480,000 a year and an arbitration report on the rent review is due in July.

Jermyn has also carried out a revaluation in respect of its 50 per cent interest in Castle Market Holdings, with the value of its investment being increased as a result by £3.7 million to £12.26 million. In addition, Jermyn benefited from £189,000 currency gain on the £6 million loan it advanced to Castle Market Holding.

Mr Horney said I remain positive about our future prospect which are further enhanced by our high level of exposure to the Irish property market. The investment in Castle Market Holdings will continue to provide further significant benefits as the favourable conditions prevailing in the Irish property market appear set to continue."

The M&S store in Cork was the only retail investment in the Irish Life portfolio bought by Castle Market. The portfolio is mainly composed of 14 office properties, mostly in Dublin, which had a rent roll of around £3.5 million at the time of the acquisition.

These different properties include the 120,000 sq ft Russell Court on St Stephen's Green, which produces rental income of around £1.2 million. Most of this is let to accountants KPMG.

Other tenants include Cornhill, the Finnish Embassy and ESB Fund Managers. And properties include the FAS building on Baggot Street and the blood bank headquarters in Pelican House on Mespil Road.