Green REIT likely to pay €160m to take over Central Park
GREEN REIT has agreed terms to take control of the rest of the Central Park office development in Dublin.
The deal is likely to cost Green around €160m once it is complete. In a stock exchange announcement, Dublin-listed Green said it had agreed terms to buy out its joint venture partner on Central Park.
Green had teamed up with the Pimco-owned company LVS II CP Investors Ltd to buy Central Park for €311m in February last year. More than 250 apartments at Central Park were later spun out to US property firm Kennedy Wilson. They are not included in yesterday's deal.
Under the terms, Green will pay €155m to take its Central Park holding from 50pc to 100pc. That is 2.7pc higher than a valuation carried out by property agents JLL last summer.
Green said the deal will cost it €160m or so once additional costs have been included. The deal will be funded through Green's revolving credit facility with Barclays Bank Ireland, and the Irish firm will also take on Pimco's 50pc of the Bank of Ireland debt secured against the Central Park properties.
Once the sale is approved by regulators, the deal price will equate to a net initial yield of about 5.6pc.
Green will fork out around €20m for the completion of Block H at Central Park. The office block has been under construction since April.
"We are delighted to acquire full control of Central Park, which is widely acknowledged as Ireland's premier business park. The development of Block H, totalling 147,000 sq ft, is now well under way and the park is fully occupied following our latest lease deal to Sage for 45,000 sq ft," Green chief executive Pat Gunne said. "We are excited to be delivering this building into the market in the early stages of the Dublin office development cycle, with estimated completion in December 2016.
"Our intention, on the back of this acquisition, is to sell a number of assets in 2016 in order to stay within our intended total gearing level of 25pc."
Green shares rose 1pc in Dublin to €1.52. The shares are up 18pc in the past year.