Industrial portfolio in three lots in capital for €28.5m
A portfolio of four industrial and logistics investments in two Dublin industrial parks is for sale with a €28.5 million guide price. Garrett McClean, director of selling agent CBRE says this represents a net initial yield (NIY) of 5.54pc and the investment offers potential for increased rental income. The vendor, St Stephen's Green Funds ICAV, is also willing to sell the portfolio in smaller lots or by way of ICAV.
Branded as the Compass Portfolio, it is fully let to three tenants. The combined floor areas extend to 19,823 sq m and the four units generate a total annual rent roll of over €1.71m.
The ICAV representing private investors bought the properties within the last four years. The units are now being offered in three separate lots: Lot 1 - The entire; Lot 2 - two North Park units with a €3.3m guide price equating to a 6.75pc NIY; and Lot 3 - two units at Greenogue Business Park with a €25.2m guide price equating to a 5.38pc NIY.
Lot 2 comprises Unit 3/4 North Park extending 1,916 sq m and Unit 5 North Park extending to 1,191 sq m. Crown Records Management Ltd occupies Unit 3/4 North Park on a 25-year lease from June 2004 currently producing €157,500 per year, with an outstanding rent review as of June 2019 and the next break option in June 2024.
Systemplus Elements Ltd occupies Unit 5 North Park on a 20-year lease from September 2015 currently producing €85,000 per year, with the next break option in September 2025.
Lot 3 comprises Block S Greenogue Business Park extending to 14,377 sq m, together with Unit 519 Greenogue Business Park extending to 2,339 sq m. They are both let to PRL Group Unlimited on 35 year leases from June 2016 and producing a combined annual rent of almost €1.47m.
This lot represent 74pc of the portfolio's total rent. PRL's next break option is in June 2036 for both properties.
Mr McClean says the portfolio offers potential for substantial guaranteed rental uplifts upon the first rent review for both PRL properties and considerable rental uplifts expected on both the North Park properties upon next review.
He also points out that the two lots reflect different types of property. Lot 2 is a mixed-use property with industrial, office and leisure uses in a high profile location which is visible from the M50. Lot 3 is a state-of-the-art logistics unit and PRL is Ireland's second largest logistics firm.
He also points out that with Dublin prime industrial yields after tightening to 5.1pc and likely to trend stronger into the next few quarters, the portfolio is expected to attract strong interest, particularly given the unusually long weighted average unexpired lease term (WAULT) of over 15 years.
ICAV's are tax efficient investment vehicles which are regulated by the Central Bank.