Green REIT boss plays down talk of market 'overheating'
ONE of the most powerful figures in the Irish commercial property market has played down talk of a bubble in the market, as another firm forked out €60m on two Dublin office blocks.
Activity in the commercial sector has rocketed in the last year, as investors pile into office blocks in particular.
That has led to concerns the market was overheating. Green REIT chief executive Pat Gunne admitted there had been "uplift" in property prices but added there was still value in the market.
"While we are seeing an uplift in values in the Irish commercial property market, there remain significant, attractive opportunities for a disciplined buyer with a proven, experienced team and a strong network of industry relationships," he said.
Mr Gunne was commenting after Green REIT posted an IMS for the year to date, showing the company has spent €335m on 16 properties so far, at a net yield of 7.9pc.
The firm has a war chest of about €350m after closing a capital raising a fortnight ago.
Meanwhile WMK Nowlan's Hibernia REIT said it has exchanged contracts to acquire Montague House and Hardwicke House in Dublin 2 from Hardwicke Group in €60m deal.
The deal equates to a price of about €692 per sq ft.
Hibernia will pay €18.25m up front and take operational control immediately. It will then pay the remaining €41.75m at any time up to mid 2016. It is expected the balance will be settled by December next year.
Hibernia boss Kevin Nowlan said: "We are delighted to be acquiring these two excellent quality, well-let office buildings, located in the heart of Dublin's CBD. They have significant reversionary potential at current estimated rental values and we have structured the transaction to maximise the returns we generate for shareholders."