The Irish Stock Exchange sees its latest addition today as property investor Yew Grove REIT is admitted to its Enterprise Securities Market. It is the first company to float since the exchange was rebranded as Euronext Dublin, while Yew Grove will also list on London's Alternative Investment Market. Yew Grove is the fourth REIT to list in Dublin since then finance minister Michael Noonan made it possible to establish such vehicles in Ireland.
REITs are seen as tax efficient ways of investing in the property market, but according to its CEO Jonathan Laredo, that is not the main reason why they chose to pursue the structure.
"If we want to raise money to invest in Irish property it's the only way that really is open to it now," he said. "It used to be possible to raise funds to invest in Irish property but those laws changed in 2016, and so in order to attract capital to invest in the property we want to buy, the REIT is the best structure."
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As part of its IPO, Yew Grove has raised €75m which will now be put towards investments. It had initially signalled that it may seek to raise €100m, but Mr Laredo said the figure was kept lower in order to maximise dividends to shareholders.
It is also taking a somewhat different investment route as part of that, ignoring Dublin's development-heavy Central Business District and focusing instead on the capital's suburbs as well as commercial properties in other counties. "When you look at where real value is and where most of the economic capacity is, it's outside of that area [the CBD]," he said. "More than 50% of all international capital investment is outside of Dublin. Ireland has a great story to tell about how attractive it is as a country to international capital - and that is really a post-Dublin story." Mr Laredo anticipates having about 60% of Yew Grove's portfolio in suburban Dublin and the greater Dublin area - with the rest located in the likes of Limerick, Cork and Galway.
Yew Grove also has a particular type of tenant in mind too - focusing in on State bodies and State agencies and the types of buildings that they might look to lease. "The reason that State bodies are looking to lease outside of central Dublin is because rents in central Dublin have become so expensive; the rates are now above the point they were pre-crisis," he said.
"The Government is one of the biggest lease holders in central Dublin but they're now moving out. Even international companies like Google and Facebook, which are in the city centre, are also looking at second siting outside of the centre for the same reasons. If you look at the residential problems you have in trying to house your staff if you're focused in central Dublin, you need to look at places like Galway, Cork, Limerick, Athlone. And that's what's happening," the CEO added.
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