Friday 27 April 2018

Green Reit chief rules out housing pivot as profits dip

Pat Gunne.
Pat Gunne.

John Mulligan and Ronald Quinlan

Green Reit CEO Pat Gunne has ruled out the possibility of expanding the property investment group's operations to include the delivery of housing.

Speaking to the Irish Independent following the announcement of Green Reit's preliminary results for the 12 months to the end of June, Mr Gunne, pictured, was adamant that the company would continue to focus on the delivery of office and logistics space.

"I think the old adage of 'stick to what you know applies in that context'," Mr Gunne said when asked if Green Reit might become involved in the provision of residential accommodation given the acute shortage of housing supply in Dublin.

Profit after tax at Green Reit was down 11pc to €129.8m in the 12 months to June 30, according to the company's results. The value of the company's property portfolio increased by 11pc from €1.24bn to €1.38bn in the same period however, while gross rental income climbed by 7.2pc year-on-year to €60.4m.

Green Reit said the completion and full letting of office developments at 32 Molesworth Street and Building H in Central Park added €6.5m to contracted annual rent and 6 cents/€41 million to EPRA NAV at the company.

Other highlights included a contract agreed with Barclays Bank Ireland for over 50pc of the space at One Molesworth Street at an annual rent of €2.4m, and lease renegotiations agreed on €4.4m annual contracted rent, principally with Bank of America Merrill Lynch in Central Park and with the Government at 76-78 Harcourt Street.

It expects its completed Horizon logistics park beside Dublin Airport to be "conservatively" valued at about €300m when it's fully completed, Mr Gunne said. The company is drafting a masterplan for the site, after securing an agreement to buy an additional 30 acres at the location to bring the total land bank there to almost 300 acres.

"We're in a pretty unique situation, not just in Dublin, but in European terms to get 300 acres between the airport and a major motorway," said Mr Gunne.

"Two years ago, we decided to reduce our allocation of capital to the retail sector and sold a lot of our retail parks, and to get as much capital into the logistics sector. We've a lot of land there, but as with any of those strategic development zones, it takes quite a while to get a plan together because you're dealing with multiple parties. But we do have enough land in phase one to play out the exiting projects.

"It's a very exciting part of our portfolio. We've a projected end value (on the logistics park), on a conservative basis, of €300m.

"But it depends on a lot of things: will they be fulfilment centres or smaller boxes? What type of densities to we get? What type of reservations there are for public infrastructure. It's something that will become clearer as we move through the planning arena."

Irish Independent

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