Yew Grove proposes share issue to fund property pipeline
By Josh White
Date: Friday 22 Nov 2019
(Sharecast News) - Ireland-focussed commercial property company Yew Grove announced the proposed issue of around 20 million new shares at a price of 97 euro cents each on Friday.
The AIM-traded real estate investment trust said the new shares would represent the second tranche of its 100 million share issuance programme, as announced on 13 June.
It said the programme was intended to fund the acquisition of assets that fit the company's investment policy.
The board said the increase in capital, together with the acquisitions of good quality income-generating assets, would help to increase its dividend capacity and improve cost ratios.
Yew Grove said the issue would enhance its position as the first mover in its target market, allowing it to take advantage of the market's strong occupier demand driving rents for office and industrial property higher.
The company had identified eight attractive properties that were available for acquisition, with a total cost of about €72m in aggregate, representing a net investment yield of between 5.0% and 6.0%, and with a short-term reversionary yield of between 7.0% and 9.5%.
Additionally, the board said the firm had identified a pipeline with a total cost of approximately €130m, which was being progressed.
The board said it continued to believe that consolidation within the company's target market offered the opportunity to build a €300m to €500m portfolio of "high-yielding, high-quality assets" over the medium term.
"Since our IPO last year we have built a strong portfolio of diversified and differentiated Irish commercial property, offering attractive yields," said chief executive officer Jonathan Laredo.
"With the new funds we are raising as part of our share issuance programme we have the opportunity to significantly expand this portfolio and take advantage of the investment opportunities we see in our target areas of the Irish commercial property market.
"Our first mover advantage in consolidating the market will allow our shareholders to benefit from the strength of the Irish economy and the tenant led market demand dynamics outside of Dublin's CBD."
Laredo said the company had already identified a "strong pipeline" of potential acquisition opportunities, with it continuing to review further investments.
"We look forward to the continued support of shareholders to help Yew Grove to achieve its goals and deliver value to all of our shareholders."
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