Brexit Means Industrial Could Be Green REIT's Next Big Moneymaker

As Brexit negotiations rumble on, Green REIT thinks many retailers will start taking more logistics space in Ireland.

Green moved into the logistics sector in 2017. With 260 acres of industrial land, and plans to develop more, Green REIT Chief Executive Pat Gunne thinks it will be in a prime position when negotiations end to fill a gap in the market left by U.K. logistic centres when there is no longer a perfectly frictionless border between the two countries.

“To have that volume of land in between the airport towards the M50 and the port tunnel is great, we just have to to wait and get clarity around the custom and border issues," Gunne said.

"Naturally, you would expect logistics to move a step on in Ireland because effectively the retail community of Ireland has subcontracted their logistics for quite some time to the U.K. You would expect the retail sector to start supporting their own logistics format particularly as it relates to the west of Ireland."

“The disruption of the internet and the impact on retail and the changing format on retail is a very natural driver of demand towards the logistics sector so to have 260 acres of land in such a key transport node is pretty impressive,” Gunne said.

If that 2.75M SF of land was developed, it would equate to a projected rent roll of €12M and an end value of €415M for Green.

“If you look at the REITs trading really well across Europe anything with a logisitcs team tends to be doing really well,” Gunne said. 

Greene has started construction of three new units totalling 207K SF at Horizon Logistics Park with one pre-let at an annual rent of €1.5M.

A further 28 acres acquired at Horizon Logistics Park will bring the total land holding to 300 acres.

Gunne was speaking as Green REIT realased its six-month interim results.

The property investment company saw rental income increase 19.2% to €33.7M.

It also reported a 24.5% uplift in EPRA earnings to €22M. 

The strong performance was driven by stronger-than-expected re-evaluations on recent office developments like 1 Molesworth Square, according to Gunne. 

Meanwhile the value of its portfolio increased by 5% to €1.45B in the last six months, or 2% on a like-for-like basis.