New Frontier Properties enters Irish market with €8.65m deal
UK Reit New Frontier Properties has acquired Unit 1, at Stadium Business Park in Dublin for €8.65m.
Extending to 78,265 sq ft, the property is let to Viking Direct (Ireland) Ltd, a global company forming part of Office Depot (one of the largest suppliers of office stationery in the world), on a 20-year full repairing and insuring (FRI) lease from August 24, 2007, at a rent of €743,518 per annum.
Based on its acquisition price and rental income, New Frontier Properties can expect to secure a net initial yield of 8.23pc on its first Irish investment.
Mike Riley, chief executive of New Frontier Properties, said: “This purchase in Dublin is in line with our investment strategy to acquire European logistics and warehouse properties to benefit from the increase in e-retailing activity across Europe.
“This modern warehouse facility is in a strategic logistics position in north-west Dublin, near the airport and Dublin Port Tunnel.”
New Frontier Properties decision to enter the market is in keeping with the strategy it outlined when issuing its annual results on August 31 last. In anticipation of continued uncertainty within the UK retail market, the Johannesburg Stock Exchange (JSE) and Mauritius-listed company indicated it would seek to grow through the purchase of retail and non-retail assets in Ireland, Germany, Austria, Slovakia, Czech Republic, Poland, the Benelux countries, as well as the UK.
New Frontier Properties was advised by pan-European real estate adviser Waypoint Asset Management in its acquisition of Unit 1, Stadium Business Park. The UK Reit’s Stadium Park acquisition was one of 33 deals totalling 407,904 sq ft of industrial space undertaken in the third quarter, according to the latest figures on the sector from JLL.
According to JLL’s divisional director and head of research, Hannah Dwyer, just one transaction greater than 50,000 sq ft was completed in the three months to the end of September.
In the previous quarter there were four such deals.
The greatest level of activity in the industrial sector continues to be in smaller-sized spaces, with 67pc of deals being for spaces of less than 10,000 sq ft. Dwyer said the outlook for industrial property remains balanced, despite factors such as “globalisation, Brexit concerns and a lack of indigenous take-up casting some caution on the sector”.