Yew Grove REIT buys three industrial properties – Yew Grove REIT has exchanged contracts on a portfolio of three industrial buildings at the IDA Business and Technology Park, Garrycastle, Athlone. The purchase price was EUR13 million, which represents a net initial yield of 7.6 per cent. after accounting for purchase costs, and a potential reversionary yield in excess of 8 per cent. The deal was funded from a combination of cash, drawing on the debt facility and the net proceeds from the equity placing completed on 12 July 2019. The purchase should be completed by 24 July 2019.
The portfolio totals 114,498 sq. ft. of modern high tech space, in three buildings with associated carparking, leased to PPD Development Ireland Ltd, KCI Manufacturing and Signature Ortho Europe Ltd. The combined leases have a weighted average unexpired lease term (WAULT) to break of 3.9 years and to lease expiry of 12.5 years. The total current rent roll for the three properties is EUR1.06 million.
The building occupied by KCI Manufacturing adjoins Yew Grove’s existing Athlone facility, also occupied by KCI Manufacturing and brings the total size of the KCI facility to c. 100,000 sq. ft.. The 3 new buildings bring Yew Grove’s total footprint in the park to c. 160,000 sq. ft. with an aggregate rent of c. EUR1.5 million.
Portfolio Update
When completed, this investment brings Yew Grove’s total portfolio to 22 properties with an annualised rent roll of over EUR7.9 million and a portfolio value of EUR102.4 million. The rent roll excludes any rent for the Cork Airport Business Park property, which had an annual rent of EUR0.63 million and for which it received a lease surrender payment of EUR3.0 million under an agreement to break the lease. The company is confident it will re-let the building.
Yew Grove announced a share issuance programme in June 2019, under which it is able to issue up to 90 million new ordinary shares in order to part-fund any acquisitions. The board believes that consolidation within its target market offers the opportunity to build a EUR300-500 million portfolio of high-yielding, high-quality assets over a three-year period.
YEW : Yew Grove REIT buys three industrial properties