Henderson Park Bets $1.5 Billion on Ireland With Green REIT Deal




 

(Bloomberg) -- Private equity firm Henderson Park Capital Partners U.K. agreed to buy Ireland's Green REIT Plc in a 1.34 billion euro ($1.5 billion) bet on the Irish real estate market even as it shows signs of slowing.

An affiliate of Henderson Park will pay 1.9135 euros per share in cash for Green, the U.K. firm said in a statement on Wednesday. The price is a 24.7% premium to the real estate firm's share price before it began a process to sell itself in April because it said investors were undervaluing the firm.

Buying Green "offers a rare opportunity to invest in a large institutional quality office portfolio and a strategic logistics park through a single transaction," Henderson Park Chief Executive Officer Nick Weber said. "We believe in the short-term and long-term prospects of the Irish market with its strong macroeconomic backdrop and underlying real estate fundamentals."

Green REIT shares traded up 4.4% at 1.90 euros in Dublin at 10:30 a.m.

The deal, which is subject to regulatory approval, comes as the Irish commercial real estate market shows signs of slowing after years of growth. Prime office rents in Dublin more than doubled since Stephen Vernon and Pat Gunne set up Green in 2013 but are unchanged in the past year. Other investors including Starwood Property Trust Inc. are offloading assets while yields, a measure of profitability, hold near record lows.

Vernon earned a reputation for prescience when he sold much of his previous property holdings before the 2008 crash. As early as 2015, he said the "golden period'' of returns was probably over. The Irish economy meanwhile is seen as particularly vulnerable to a so-called no-deal Brexit.

Still, demand for office space in Dublin is at an all time high, according to CBRE Group Inc. The deal is "a welcome vote of confidence in Irish commercial real estate," Colm Lauder, an analyst at Goodbody Stockbrokers in Dublin, said in a research note.

JP Morgan Cazenove Ltd. is lead financial adviser and corporate broker to Green REIT, while Dublin-based securities firm Davy is joint financial adviser and corporate broker. Eastdil Secured LLC and Wells Fargo Securities LLC are financial advisers to Henderson Park.

To contact the reporter on this story: Peter Flanagan in Dublin at pflanagan23@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Shelley Robinson, Marion Dakers

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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