Prime industrial and logistics portfolio at €28.5m offers 5.54% net initial yield

Agent CBRE is guiding a price of €28.5 million for a portfolio of four of the highest quality industrial and logisitics investments available in the Dublin market.

With locations at North Park in north Dublin and Greenogue Business Park on the south side of the city, the properties within the Compass Portfolio extend to a combined area of 19,823sq m, and are producing a total annual rent roll of €1,711,044.

The four assets include Block S, Greenogue Business Park ( 14,377sq m), unit 519 Greenogue Business Park ( 2,339sq m), unit 3/4 North Park ( 1,916sq m) and unit 5 North Park (1,191sq m).

The portfolio is fully let to three blue-chip tenants with the PRL Group Unlimited occupying both Greenogue properties on two 35-year leases from June 2016. These properties are currently producing a combined rent of €1,468,544 per annum, which represents 74 per cent of the portfolio’s total rent roll. PRL’s next break option is in June 2036 for both properties.

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Crown Records Management Ltd occupies unit 3/4 North Park on a 25-year lease from June 2004. This property is producing rental income of €157,500 per annum, with an outstanding rent review as of June 2019. The next break option is in June 2024.

Systemplus Elements Ltd occupy unit 5 North Park on a 20-year lease from September 2015. This property is producing €85,000 per annum with the next break option due in September 2025. The portfolio's weighted average unexpired lease term (WAULT) is 15.03 years as at October 1st, 2019, including rent reviews.

Reversionary potential

The Compass portfolio offers an investor significant reversionary potential with substantial guaranteed rental uplifts upon the first rent review for both PRL properties with considerable rental uplifts expected on both the North Park properties upon next review.

Garrett McClean who is handling the sale on behalf of CBRE is offering the portfolio in three separate lots. They are: Lot 1 – the entire Lot 2 – North Lot (2 x North Park Units), and Lot 3 – South Lot (2 x Greenogue Business Park Units).

The guide price of €28.5 million attached to the entire represents an attractive net initial yield of 5.54 per cent.

Garrett McClean of CBRE says: “Prime industrial yields in the capital are currently 5.1 per cent and are likely to trend stronger into the next few quarters. With the lack of similar prime logistics opportunities and a solid rental growth expectation in the sector, we’re anticipating strong interest in this portfolio, particularly given the unusually-long WAULT of over 15 years.”