Vernon's REIT plans a €155m property bender before December
Stephen Vernon's Green real estate investment trust (REIT) is gearing up for what the property svengali says "will be a very interesting market in the second half of this year".
The new listed fund aims to spend €155m this year, which would represent half of the €310m fund it has raised to date, on Irish commercial property, he told the Sunday Independent.
There is certainly plenty of stock due to be shifted before this year is out. Danske Bank, which is eager to exit its distressed Irish property involvement by 2014, is expected by property market sources to sell €200m worth in the coming months.
The 'pillar banks' will also bring more stock to the market, with around €500m in further commercial property transactions likely in 2013.
Lloyds plans to bring a substantial former Liam Carroll portfolio to the market in the autumn, valued at between €120m and €140m of mainly office buildings, currently managed for the bank by Green Property.
Starting in September, Vernon said, "we are hoping to spend a substantial part of the €310m equity we have raised in the first 12 months – and perhaps half of it in the run-up to Christmas".
As well as institutional investors, a group of highly wealthy individuals came on board the Green REIT through Davys.
REITs have been a popular choice for pensions planning for individual investors in the United States.
While Vernon said the circa €16bn worth of IBRC loans due to be sold were not in Green REIT's immediate sights, there would be discussions with everyone, including special liquidator Kieran Wallace and the other banks with property to sell.
"We aren't looking at any loan books but we could end up buying some in some shape or form," said Vernon. "We're not ruling it out but it's not really our ball game; we are not looking to compete with private equity.
"We're about trying to target specific assets that we think have potential to add value either through asset management or through development in the form of refurbishment or new development."
Investment is expected to be up to 75 per cent in quality office buildings, with 10-15 per cent industrial investment and the remainder in retail blocks like supermarkets.
As to any suggestions that they are a vehicle for people to pay less tax, "the tax take is greater in REITs than in old-fashioned real estate", Vernon said at the fund's stock exchange launch. "It's a misunderstanding to say that REITs are tax havens."