Irish property investment company Green REIT has reported a strong performance to the end of June, posting growth of 24.4 per cent and a profit of €157m (£114m).
Commenting on the company’s preliminary results, executive chairman Stephen Vernon admitted the “golden period” of returns for Irish commercial property is probably over, and that Green REIT is unlikely to see another year of 24 per cent growth.
He also signalled that his company was now drawing in its horns. “Based on current prices, we are not terribly optimistic that we will find more acquisitions,” Vernon said.
In little over two years Green REIT has bought 24 properties, but both he and chief executive Pat Gunne stressed they now intended to focus on managing existing offices and completing work on those under development.
Green REIT’s portfolio has a distinct Dublin bias – 95 per cent of its value is located in the Irish capital – including Central Park in Leopardstown. Rental and related income from its properties soared from €12.2m (£8.8m) in 2014 to €45.9m (£33.3) this year.
“The Irish commercial property cycle has advanced significantly since our initial public offering in July, 2013, as witnessed by our full year results,” Vernon added. “Maintaining leverage ratios at below industry average and closely monitoring the Dublin development cycle, as we aim for early participation, are central to our strategy of delivering attractive risk adjusted returns.”
Speaking after the results publication, Pat Gunne warned the Dublin office market is now facing “possible oversupply” from 2018 onwards. With five-million square feet of prestige office space in the pipeline, he added: “One-million is pre-let and we would expect the other four-million to be funded over the next 12 months.”
