Monday 16 September 2019

Goodman's stake in Green REIT lands him €67m

Beef baron cashes in as property investment firm sold to London-based Henderson Park in €1.34bn mega-deal

Beef baron Larry Goodman. Photo: Steve Humphreys
Beef baron Larry Goodman. Photo: Steve Humphreys
Ellie Donnelly

Ellie Donnelly

BEEF baron Larry Goodman is set to receive €67m for his stake after the sale of Green REIT, one of the state's largest property investment firms.

A spokesman for Mr Goodman declined to comment on the businessman's share of the €1.34bn acquisition by UK property company Henderson Park. However, the deal has been described by analysts as "a welcome vote of confidence" in the Irish commercial real estate market.

Colm Lauder, of Goodbody Stockbrokers, said the price paid for the group shows that property companies here are currently trading at a price not reflective of the value of the market.

"We expected Green REIT to trade strongly given the level of investor interest in Ireland. The real estate income streams here are attractive for investors when compared to other European cities," Mr Lauder added.

Last month Goodman's Vevan Unlimited, a company that is ultimately controlled by the Goodman Family Trust, as well as the Goodman Family Foundation, raised its stake in Green Reit to 5pc.

The 'persistent discount' between Green Reit's share price and the value of its portfolio of largely high-end commercial property assets - mainly in Dublin - was "at the core" of the decision to sell, Green's bosses said when they put the business up for sale in April.

Property veterans Stephen Vernon and Pat Gunne were among those in the industry who came through the last crash in good stead - having sold assets before the bubble burst.

They then launched Green Reit in 2013, tapping the market for cash in order to buy assets at knock-down prices and using the then newly-introduced real estate investment trust (REIT) legislation to set up the first listed property company of its type in Ireland.

The company's key assets include the Central Park office campus in Leopardstown, Fitzwilliam Hall in Dublin 2, and One Albert Quay in Cork city.

Gary Kennedy, chairman of Green REIT, said: "Following a highly competitive process, the cash offer by Henderson Park to acquire the company represents an attractive outcome for shareholders delivering a premium to the share price prior to the announcement of the sale process and to Green REIT's Net Asset Value."

Under the terms of the acquisition shareholders will receive €1.9135 per share in cash, a 4.9pc premium on the group's closing price on Tuesday. The price agreed is a premium of 24.7pc per share on Green REIT's closing price of €1.534 on 12 April, the day before it announced it was putting itself up for sale.

Prolific Irish property investors Irish Life and Kennedy Wilson were understood to have progressed to the second round of bidding for the company.

But they were edged out by Henderson Park, a mostly London-focused property investment firm set up in 2016 by Nick Weber, a former Goldman Sachs and Mount Kellett employee.

Meanwhile, Green REIT also yesterday reported a 21pc jump in its EPRA earnings - that is its underlying net rental profit - to €44.6m in the 12 months to June 30.

The value of Green REIT's portfolio increased by 8pc during the period to €1.5bn, according to full year results from the group.

Profit after tax fell 36pc to €91.8m, however this includes fair value movements on the company's investment properties.

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