After allowing the country's first real estate investment trusts (REITs) last year via legislation in April, Ireland has seen the new trusts perform better than the markets had expected. According to a Wall Street Journal report, Green REIT and Hibernia REIT raised €310 million and €365 million ($419.3 million and $493.7 million), respectively, in IPOs last year on the Irish Stock Exchange, and are attracting interest from some of the large investors betting on an Irish property recovery.
"Obviously these are blank check companies at the beginning of their lives; time will tell whether or not they will be able to buy the right assets, but we believe that with good management they should be able to do so," said Michael Shaoul, chairman and CEO of Marketfield Asset Management, an investment advisory firm that holds more than 9% of both Green REIT and Hibernia.
Leonard Geiger, senior vice president of investment manager Cohen & Steers, said that externally managed, so-called blind pools that raise capital without already owning properties "are clearly suboptimal." But, he said, "Most importantly, the introduction of Irish REITs allows investors to access this depressed, peripheral market at a time when recovery in [demand, rents, vacancy rates] and values is under way."
Green REIT has acquired the headquarters of EBS Building Society, a subsidiary of Allied Irish Bank, and the Independent Newspapers' print works in Dublin, according to the report. The company also purchased from Danske Bank a portfolio of 10 properties located in Dublin, Kildare and Limerick, which includes the Fitzwilliam Hall in Dublin, for a total of €178 million.
Hibernia plans to purchase properties for about €500 million, according to Kevin Nowlan, the company's managing director. "We see ourselves holding 60% to 65% offices, 20% to 25% retail and balance being industrial, residential and multifamily," Mr. Nowlan said.
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