Saturday 21 September 2019

Yew Grove spends €16m on IDA offices in Donegal

Jonathan Laredo, Yew Grove CEO
Jonathan Laredo, Yew Grove CEO
Ellie Donnelly

Ellie Donnelly

Yew Grove real estate investment trust (Reit) has acquired three office properties in the IDA Business Park in Letterkenny, County Donegal for €16m.

The three buildings comprise of 90,548 sq. ft. of internal space completed to Grade A specification, having undergone a major refurbishment in 2017.

In addition, there are 688 car parking spaces on the 5.85 acre site.

The buildings have a net initial yield of 8.35pc, and are currently tenanted by Optum Operations under a 10 year lease, with nine years of certain term remaining.

The leases are guaranteed by Optum's parent, the United Health Group, one of the US's largest corporations by revenue.

Yew Grove, which in June became the first new share to trade on the Irish stock exchange since it became Euronext Dublin, has now deployed €76m since its IPO.

The company also said today that it has agreed a three year revolving loan facility with AIB.

The facility is for up to €19.9m, and is within the loan to value target of 25pc. It will be used to part finance the company's acquisition of properties, and to enhance investment returns, including dividends to shareholders.

Yew Grove now has available resources of €16m to acquire further properties in the near-term, and the group said the pipeline of potential acquisitions "remains significant".

Including the acquisition referred to above, the group now has annualised passing rent of €6.3m. 

In September the company said its maiden dividend for 2018 was expected to be in a range of 1.0 - 2.0 cents per share range. However negotiations and due diligence on recently announced acquisitions have taken longer than anticipated, and because of this the dividend for the period from IPO to 31 December 2018 is now expected to be marginally below the lower end of the previously guided range.

The board said it is "confident" to reiterate dividend guidance of 7c per share for financial year 2019.

"In the short period since IPO, Yew Grove has successfully deployed the capital raised and has a strong pipeline of potential acquisitions of well tenanted, well covenanted and high yielding commercial real estate," Jonathan Laredo, Yew Grove CEO, said. 

"The high quality rental income stream positions us to pay a maiden dividend for 2018 and retain guidance for a significant dividend increase in 2019."

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