Green Reit, Ireland’s first real estate investment trust, is to be sold to London-based property investment group Henderson Park in a €1.34bn deal that underlines the slowdown in the country’s commercial property market after a period of strong growth.
Green was floated six years ago as a recovery began in the Irish property market, which had been knocked by the financial crash of 2008. It has increased its real estate portfolio to a value of €1.48bn, predominantly based in Dublin, but its owners have been frustrated that its shares have traded at a perceived discount to the value of its assets for the past three years.
“Green Reit has been trading at a persistent structural discount to its underlying net asset value since early 2016,” said Gary Kennedy, chairman of the group. “This persistent discount has been inconsistent with the value of the company’s assets, management, business plan and performance as well as the Irish commercial property sector.”
The decision to sell the company, made in April, comes as the Irish commercial property market has cooled, with double digit annual increases giving way to single-digit ones. Prices rose by 5 per cent in 2018, according to the country’s central bank.
The cash deal agreed with Henderson values Green’s shares at €1.91 a share, a 25 per cent premium to its April share price before the start of the sale process and a 5 per cent premium to Monday’s closing share price. The companies said it represents a 2 per cent premium to the net asset value at the end of June.
Henderson Park was set up in 2016 by Nick Weber, a former Goldman Sachs executive, and the hedge fund Mount Kellett.
“The portfolio offers exposure to high-quality properties located predominantly in Dublin, leased to blue-chip tenants, and two strategic development sites,” said Mr Weber, Henderson’s chief executive. “We believe in the short-term and long-term prospects of the Irish market with its strong macroeconomic backdrop and underlying real estate fundamentals.”