Green REIT (GRN) operates in and around Dublin with a property portfolio comprising mainly offices and logistics. And, unlike in the UK, yield compression is alive and well, with the portfolio enjoying a €25.4m (£21.9m) valuation uplift in the six months to December 2018. Headline profits were lower because the uplift was less than the €31.3m recorded a year earlier.
Contracted annual rent rose by 4 per cent to €74.4m, and while further capital appreciation is expected, the primary growth driver will be increased rents. This is specifically true on the logistics side, where quality warehouse space is in short supply. So the four rent reviews settled in the first half achieved a 37 per cent uplift on the previous rent. The overall strong rental performance came despite the sale of Westland Retail Park, which brought in a contracted rental income of €8.5m.
With demand remaining brisk, the company currently has a development pipeline worth around €600m, of which around two-thirds is urban logistics, while there is 101,000 square feet (sq ft) of office space completing in the first quarter of 2019. In addition, a 115,000 sq ft unit is being constructed and already pre-let to Bunzl. All in all, the current pipeline has the capacity to generate €37m in new rent, around half the group’s existing total rental income.
GREEN REIT (GRN) | ||||
ORD PRICE: | 146¢ | MARKET VALUE: | €1.02bn | |
TOUCH: | 140.2-149.2¢ | 12-MONTH HIGH: | 162¢ | LOW: 130¢ |
DIVIDEND YIELD: | 3.8% | DEVELOPMENT PROP: | nil | |
DISCOUNT TO NAV: | 20% | |||
INVESTMENT PROP: | €1.48bn | NET DEBT: | 17% |
Half-year to 31 Dec | Net asset value (¢) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
2017 | 180 | 53.0 | 7.7 | 2.6 |
2018 | 183 | 45.6 | 6.5 | 2.8 |
% change | +1 | -14 | -16 | +8 |
Ex-div: | 07 Mar | |||
Payment: | 01 Apr |