Monday 10 December 2018

Plans for retail Reit advance as private equity weighs exit

Asset manager Sigma in talks with mall owners and brokers over flotation

Brian McKiernan, chief executive of Davy stockbrokers
Brian McKiernan, chief executive of Davy stockbrokers

Ronald Quinlan - Commercial Property Editor

Ireland's two biggest stockbrokers, Davy and Goodbody, have had discussions with the country's main retail asset manager, Sigma Retail Partners, with a view to advising on the flotation of a new real estate investment trust (Reit), the Sunday Independent can reveal.

Sigma is also understood to have had discussions with several private-equity firms which own extensive retail assets about the formation of the new publicly-quoted Reit.

The proposed Reit would give investors access to Ireland's retail sector by allowing them to invest in stocks in a tax-efficient trust.

Spokesmen for both Davy and Goodbody declined to comment on the matter.

Should it proceed, it would be the fourth Irish real estate investment trust. Three Reits are already listed on the Irish Stock Exchange - Green Reit, Hibernia Reit and Ires Reit.

While Ireland's existing Reits specialise in office, industrial and residential accommodation respectively, Sigma Retail Partners has long been considered as the most likely candidate to promote the creation of a retail Reit.

It is the asset manager for many of the shopping centres and retail parks acquired by private-equity firms here following the crash.

Sigma is involved in the management of retail assets with a combined value of over €500m in 13 locations including Galway, Navan, Bray, Drogheda, Naas, Thurles, and Waterford.

Headed up by Nama's former senior retail property adviser Marcus Wren, and retail property specialist Neil Bannon, Sigma will shortly take over the management of the Square shopping centre in Tallaght, once its acquisition by US private-equity giant Oaktree for €250m is complete.

Oaktree's purchase of the Square is widely seen within the property industry to have accelerated the timetable for the establishment of the proposed retail Reit.

Referring to the deal, one industry source described it as "an important step in providing the scale necessary for any public offering".

While Oaktree's acquisition of the Square has served to ramp up speculation about a retail Reit, a source close to the matter insisted a flotation was "still some way from fruition".

However, the Sunday Independent has been informed that Sigma has had discussions with a number of acquirers of Irish shopping centres about the formation of a retail Reit that would provide them with a means of exiting the Irish market.

It is unclear whether the proposed structure would comprise the assets of one or more owners.

Sunday Indo Business

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