Yew Grove REIT (LON:YEW), which owns a diversified portfolio of Irish commercial property assets, has announced that it has reached agreement to purchase an office building at the IDA Ireland Business and Technology Park, Garrycastle, Athlone. The purchase price for the building will be €12 million, which represents a net initial yield of 7.2 per cent. after accounting for purchase costs and has reversionary potential linked to CPI. The purchase is expected to complete by 3 January 2020.
The building, constructed in 2016, has 45,370 sq. ft. of modern office space with associated car parking and is leased to an FDI tenant. The lease has a weighted average unexpired lease term (WAULT) to break of 8.9 years and to lease expiry of 11.9 years. The total current rent roll for the building is €0.95 million per annum.
The acquisition of this building brings Yew Grove’s total footprint in this IDA Ireland park to c.205,000 sq. ft. in five buildings with an aggregate annual rent of c.€2.4 million from four different tenants.
Commenting on the acquisition, Yew Grove CEO Jonathan Laredo said:
“We are pleased to have expanded our footprint in Athlone, a major med-tech hub in Ireland. This is a desirable asset with an excellent tenant in one of the country’s premier business and technology parks and will allow the Company to expand in line with our clients.
“There remains significant opportunity to grow this portfolio, both through further acquisitions and through asset management opportunities within the existing properties, and these activities will generate superior returns for our shareholders. We continue to effectively deploy our capital in a portfolio at attractive yields with robust tenant covenants and very strong occupancy.”
