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IRISH COMMERCIAL PROPERTY player Hibernia REIT has snapped up the Gateway site at Newlands cross in Dublin for less than ten per cent of what it was sold for in 2006.
The investor paid €10 million for the site, which was sold by An Post to two Dublin brothers in 2006 for €107 million.
Hibernia said that it would finance the purchase from existing cash resources.
The site, which covers 14 acres and offers 178,000 square feet of warehouse accommodation is 46 per cent occupied and will net the new owners an annual rental income of €517,000.
46 per cent of the property is currently occupied, meaning that the new owner will have plenty of scope to increase the yield on the property by attracting new clients.
Hibernia has now made three major acquisitions since listing on the Dublin and London markets in December 2013, and has an investment portfolio of €128 million spread across a variety of assets.
Hibernia chief executive Kevin Nowlan said:
We are pleased to have acquired an income producing asset with enormous development potential in the medium to long term. The site occupies a strategic location adjacent to the intersection of Ireland’s two busiest roads and Dublin’s light rail system.
The site is near the M50 and the Luas Red Line stop at the Red Cow. A document distributed by real estate agent CBRE outlines zoning for the site covering a wide variety of services, including manufacturing, R&D, light industry and enterprise areas.
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I presume that the Irish tax payer made up the difference between the two prices??
if its giving a return of .5m€ for 46%. would it not have been in public interest to keep it, find a tenant for the remainder 54% and sell it when the market picks up
Brian you might want to read the first few paragraphs of story again.
Thomas Maher
No media says who the seller was. All that is stated is that the site was “sourced” by Hibernia REIT, but no mention is made from whom it was “sourced”.. So we don’t know who sold it. Whoever splashed the cash like that in 2006 is most likely a bailout out developer in some kind of state protection scheme for their own good if not the taxpayers!
Why? Brian Magee’s logic seems pretty sound to me. The balance of €97 Million is typically the sort of debt that was foolishly guaranteed by the FF Government. The taxpayer has since been forced to subsidise the banks. This looks like a great investment for these guys. It was sold off way too soon and at way below it’s value.
Good luck to them
Ireland for sale.
NAMA finance and capital gains tax exemptions available.
Vultures and villain buyers only.
Your investment is 100% guaranteed by the Irish taxpayer, and their children, and their children’s children…….
At least its10 €million for the Irish taxpayers instead of zero if the building was allowed to decay and rot,not ideal but half a loaf is better than none.
Richard, it is let and getting over 500k a year, once newlands cross upgrade is complete it’ll be worth more. If they rent out the remaining56% they could get in excess of 1M a year
Spot on Brian.
WTF is NAMA and IBRC and KPMG aka “the special liquidators” and all the other clowns on corporate welfare doing for their billions???
This is probably a more realistic and sensible price for the site.
Another example of the madness that went on in our grossly over inflated property market.
Who was the seller? Hopefully not a government agency for bailed-out and indigent property owners! Who would sell a property at such a low sum wen such potential for developing it exists? It would be interesting to have some more information on the sellers.
On REITS:
“REITs are quoted companies that own or operate commercial property. They are not taxed on the rental income as long as they pay 85% of it to their shareholders as a dividend.” http://www.rte.ie/news/business/2014/0311/601417-hibernia-reit/
That’s nice, tax-free income for shareholders.
Not necessarily, the company would be tax exempt. The trade off for Irish revenue is that the shareholders would have to pay income tax on the dividends they receive.
Even if the shareholders were based in a foreign jurisdiction Neil??
Maybe the sellers financed it with some of the non Nama banks being Bos or ulster bank which would not have any impact for the Irish taxpayer, also sold with a 5% yield with room to improve in the medium term wouldn’t sound like a giveaway to me for a large older factory building
Isn’t it true that there are BUST developers like Jonny Ronan being paid up to 200,000 euro a year for co-operating with Nama.I wondering who is buying Ireland? Where is he now?Ya that’s wright,building developments thousands of miles away! We,Ireland must be the laughing stock of the World! When are we going to Revolt?
have your say