Friends First Irish Commercial Property Fund has had a strong start to the year with returns of 4.58 per cent in the first quarter, coming out on top of its peer group, according to the trade publication Financial Express.
The initial income yield from the €315 million portfolio of 5.22 per cent is increasing through selective acquisitions and strategic leasing events.
The fund has a mixture of core income producing properties such as the Disney store on Grafton Street and the Quartz office building at Elmpark on the Merrion Road in Dublin 4 as well as some value added investments where it is planned to unlock embedded capital values through redevelopment.
These will include Blackrock Shopping Centre and the Royal Hibernian Way where it is intended to proceed with planning applications later this year.
Claire Solon, head of property at Friends First, said that with the Irish retail market continuing to perform well they believed the acquisition of these properties would assist in the ongoing strong performance of the fund.
The retail bias of the portfolio was already delivering good returns and they believed active asset management should underpin their success into the future.
Retail parks
Friends First recently acquired two retail parks, the Globe Retail Park in Naas for close to the €26 million guide price and the Kilkenny Retail Park for around €25 million.
The Naas investment will show a return of 6.7 per cent while the Kilkenny park will yield 7 per cent despite the fact that it has three vacant buildings among the 13,498sq m (145,305sq ft) of retail facilities. Earlier this year, Friends First acquired the remaining 50 per cent stake it did not own in the Royal Hibernian Way in Dublin city centre.
It also bought two vacant office blocks, 23 Shelbourne Road, Ballsbridge, which cost in the region of €20 million and Pelham House in Sandyford which cost about €7million. Both buildings have about 2,554sq m (27,500sq ft) and are to be refurbished before going back on the letting market
