21 Dec 2018 07:01
21st December 2018
Yew Grove REIT plc
(the "Company" or "Yew Grove")
Acquisition and Trading Update
Acquisition of Buildings B1, B2 and B3 on the IDA Business Park in Letterkenny for €16 million
Yew Grove REIT plc, which owns a diversified portfolio of Irish commercial property assets, is pleased to announce that it has exchanged contracts on the acquisition of three office properties, located in the IDA Business Park, Letterkenny, County Donegal for an agreed price of €16 million, representing a net initial yield of 8.35 per cent. after accounting for all purchase costs.
The buildings are tenanted by Optum Operations (Ireland) Ltd under a 10 year lease with nine years of certain term remaining. The leases are guaranteed by Optum's parent, the United Health Group, the largest healthcare business globally and one of the US's largest corporations by revenue.
The three buildings comprise 90,548 sq. ft. of net internal space completed to Grade A specification, having undergone a major refurbishment in 2017 prior to Optum entering the lease. In addition, there are 688 surface car parking spaces on the 2.34 ha (5.85 acre) site.
Trading Update
Yew Grove has now successfully deployed €76m since IPO in June 2018. The concurrently announced revolving credit facility of €19.9m means that the Company has available resources of €16m to acquire further properties in the near-term. The pipeline of potential acquisitions remains significant.
Including the acquisition referred to above, annualised passing rent is currently €6.3m. An independent valuation of the portfolio at 31 December 2018 will be included in the Preliminary Announcement in February and the Board of the Company is confident this will show a further increase in NAV as compared with 30 June 2018.
As noted in the Company's interim results announcement in September, our maiden dividend for 2018 was expected at that time to be in a range of 1.0 - 2.0 cents per share, dependent on the timing of further acquisitions prior to year-end. During this period, negotiations and due diligence on recently announced acquisitions and potential further near-term acquisitions have taken somewhat longer than anticipated, with the result that the dividend for the period from IPO to 31 December 2018 is now expected to be marginally below the lower end of the previously guided range. Taking account of the acquisitions now completed, together with confirmation of new banking facilities with AIB to support further acquisitions in the near-term, the Board of the Company is confident to reiterate dividend guidance of 7c per share for financial year 2019 based on the current share count. Commencing with respect to First Quarter 2019, the Company intends to pay dividends on a quarterly basis.
Commenting on the acquisition and trading update, Yew Grove CEO Jonathan Laredo said:
"We are delighted to announce the acquisition of the IDA Business Park assets in Letterkenny. The buildings have been finished to a very high quality and the recent refurbishment is a tangible sign of the tenant's commitment to the site and the area, one of its largest operations outside of the US. Not only has Yew Grove acquired very high quality properties but the purchase gives the company a strong and secure income stream.
In the short period since IPO, Yew Grove has successfully deployed the capital raised and has a strong pipeline of potential acquisitions of well tenanted, well covenanted and high yielding commercial real estate. The high quality rental income stream positions us to pay a maiden dividend for 2018 and retain guidance for a significant dividend increase in 2019. We look forward to 2019 and the continued delivery against our stated objectives."
Enquiries:
Yew Grove REIT plc | Tel: +353 1 4853950 |
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Jonathan Laredo, Chief Executive Officer Michael Gibbons, Chief Investment Officer Charles Peach, Chief Financial Officer
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Investec Bank plc |
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Joint Broker & ESM Advisor Tommy Conway, Eoin Kennedy
Joint Broker & NOMAD David Anderson, Darren Vickers | Tel: +353 1 421 0000
Tel: +44 207 5975970
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Goodbody Stockbrokers UC |
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Joint Broker David Kearney, Joe Gill | Tel: +353 1 667 0400
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Hume Brophy | Tel: + 353 1 662 4712 | |
Media Enquiries Edel Bach, Karin O'Conor | yewgrove@humebrophy.com | |
Notes to editors:
Yew Grove REIT raised gross proceeds of approximately €75 million in June 2018 to invest in a diversified portfolio of Irish commercial property, with a particular focus on well-tenanted commercial real estate assets comprising office and industrial assets let to Irish government entities (and other state bodies), IDA Ireland supported and other FDI companies, and larger corporates, located in attractive locations in the Dublin suburbs and catchment area, main regional cities, and IDA business parks (the "Geographic Target Market").
ENDS