Wednesday 23 October 2019

Green Reit 'pleased' with sale progression as profits rise

Chairman of Green Reit, Gary Kennedy
Chairman of Green Reit, Gary Kennedy
Ellie Donnelly

Ellie Donnelly

Green Reit said it is "pleased" with how its sale process is going and the level of interest expressed to-date.

The commercial property firm dramatically put itself on the market earlier this year, following a "comprehensive and carefully considered" review of its options to maximise shareholder value.

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The persistent discount between Green Reit's share price and the value of its portfolio of largely high-end commercial property assets was "at the core" of the decision to sell, the group said in April.

"We will provide a further update to shareholders as and when appropriate," Gary Kennedy, chairman of Green Reit, said in a trading update yesterday.

Green Reit was the first Irish real estate investment trust or reit, a special type of company that benefits from reduced taxation. This includes not having to pay corporation tax on rental profits or the standard capital gains on asset sales, as long as it meets certain criteria including only investing in property and distributing the vast bulk of income as dividends each year.

Rental income at the group has increased to €79.4m from €75.5m since January.

When income from lettings with terms agreed and those in advanced discussions are included, then rental income rose to €83.3m in the six month period. This is an increase of 10pc on the annual rent at 31 December, in what the group said were "favourable market conditions."

However the group's vacancy rate has risen to 5pc, from 3.5pc in 2018. Mr Kennedy said: "The leasing success achieved to date in 2019 demonstrates the high quality of our portfolio and the very supportive backdrop of the market, which in quarter one of 2019 witnessed a new record level of take-up in the Dublin office market."

"Combined with the sustained low interest rate environment, the operating environment remains strong across both the occupier and capital markets."

Shares in Green Reit were up just under 2pc yesterday.

Irish Independent

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