Yew Grove REIT PLC Acquisition and Trading Update (2011L)

TIDMYEW

RNS Number : 2011L

Yew Grove REIT PLC

21 December 2018

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 EUR16 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 EUR16 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 EUR76m since IPO in June 2018. The concurrently announced revolving credit facility of EUR19.9m means that the Company has available resources of EUR16m 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 EUR6.3m. 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: [phone] 
Jonathan Laredo, Chief Executive 
 Officer 
 Michael Gibbons, Chief Investment 
 Officer 
 Charles Peach, Chief Financial 
 Officer 
Investec Bank plc 
Joint Broker & ESM Advisor          Tel: [phone] 
 Tommy Conway, Eoin Kennedy          0000 
 
 Joint Broker & NOMAD 
 David Anderson, Darren Vickers      Tel: [phone] 
 
  Goodbody Stockbrokers UC 
Joint Broker                        Tel: [phone] 
 David Kearney, Joe Gill             0400 
                                    Tel: + 353 1 662 
  Hume Brophy                        4712 
Media Enquiries                     [e-mail] 
 Edel Bach, Karin O'Conor 
 
 

Notes to editors:

Yew Grove REIT raised gross proceeds of approximately EUR75 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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

ACQPGGWUPUPRPUU

(END) Dow Jones Newswires

December 21, 2018 02:01 ET (07:01 GMT)