Yew Grove REIT plc (LON:YEW), which owns a diversified portfolio of Irish commercial property assets, has announced that it has exchanged contracts for the purchase of an industrial building in Dundalk and two adjoining office properties in Citywest Dublin.
In Dundalk, the Company has exchanged contracts on Tanola House on Coes Road, Dundalk, a recently constructed high bay industrial building of 86,451 sq. ft. over two adjoining blocks. The property has a 12.5m eaves height, 120 car parking spaces and is tenanted by a US multinational under two leases which together have a weighted average unexpired lease term (“WAULT”) to first break of approximately 8.4 years and a WAULT to expiry of 18.4 years. Tanola House was acquired for c. €8 million, with a current annual rent of €601,000 stepping up in approximately four years across both leases to €631,000, representing a net initial yield of 6.9% and increasing to 7.3% at the step up.
The Company has also exchanged contracts to purchase Blocks E&F, Citywest Dublin, for €11 million. The property has two adjoining office blocks of 45,972 sq. ft. with 165 car parking spaces and is fully tenanted by three multinational tenants paying a current annual rent of €984,000. This represents a net initial yield of 8.2% with a potential reversionary yield of 9.2%. The property has a WAULT of 4.0 years to first break and 6.4 years to expiry.
On completion of these transactions, Yew Grove will have a portfolio of 24 properties with a proforma gross asset value of approximately €162 million (which will rise to an estimated €172 million on completion of the forward funding transaction in Athlone) and a current annualised rent roll of approximately €12.9 million.
The purchases were funded utilising the proceeds of the Company’s recent equity issue and debt capacity from its revolving credit facility.
Yew Grove REIT has a differentiated and diverse portfolio of well tenanted commercial office and industrial properties situated outside of the Dublin central business district. The Company’s geographic target market continues to combine properties with tenants with strong credit quality and attractive purchase yields and rising rents.
Commenting on the transactions, Yew Grove CEO Jonathan Laredo, said:
“We are pleased with the acquisitions in Dundalk and Citywest, the new properties are reversionary and will benefit from Yew Grove’s asset management capabilities, which should generate significant value for both tenants and our shareholders.
“Having again demonstrated our ability to effectively and rapidly deploy capital, we remain focused on the significant and valuable opportunities in today’s market to acquire well built, well tenanted assets.”