French investor Corum Asset Management has returned to the Irish acquisitions trail with the purchase for €19.4 million of units 20-29 at Mervue Business & Technology Park in Galway. The completion of the deal brings its overall investment in the Republic and Northern Ireland to more than €320 million. Units 20-29 were offered to the market by agent Harvey in November of last year as part of a wider sale for €48 million of property ICAV, the Novelty Portfolio.
Apart from the Galway units (guide price €19.5m) the portfolio had comprised of two other assets, located in Cloverhill Industrial Estate, Clondalkin, Dublin 22, (guide price €17m) and Swords Enterprise Park, Co Dublin, (guide price €11.5m). Taken together the offering made up about 447,000sq ft of accommodation generating income of about €3.15 million, representing an overall net initial yield of 6 per cent.
The Galway property acquired by Corum extends across a total area of 160,000sq ft on a site of 7.09 acres and comprises one manufacturing unit leased to HID Global Ireland Teoranta and guaranteed by HID Global Corporation, and one office unit, leased to Avaya International Sales Limited.
The HID premises underwent an extensive modification/rebuild programme in 2020/2021, while the Avaya premises saw recent capital expenditure of $1.7 million. HID, whose lease commenced in November 2019, took possession of the property in the final quarter of 2021, following practical completion of the first phases of the works. It signed up to a 25-year-lease, with a tenant-break option in 2034, giving Corum a guaranteed income for a further 12 years off a passing rent equating to a conservative €8.00 per sq ft.
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HID Global is owned by the Assa Abloy Group, a global leader in the manufacture of physical and non-physical access products and solutions, with operations in over 70 countries worldwide. Its Irish business is best known for being the provider of the enabling technology for Ireland’s passport card programme, the first of its kind to allow travellers to cross borders in Europe with an electronic passport card as opposed to a traditional passport booklet.
Avaya’s lease, meanwhile, is set to run for a further four years and four months, with a rent review in December this year. This is expected to see a strong reversionary rent being realised, given the building’s current level of just €11.57 per sq ft.
Avaya is an acknowledged leader in the software and tech industry, and its Irish operation reported a turnover of €516 million, a pre-tax profit of €39 million and shareholders’ funds of €129 million in September 2021.
News of Corum’s purchase of the Galway asset comes just two months on from its purchase for €14.725 million of Dromore House, a prime 80,000sq ft office property in Shannon, Co Clare, from Clyde Real Estate, the company set up by former Dragons’ Den investor Seán Gallagher and telecoms entrepreneur Colm Piercy.
Prior to that Corum paid €60 million in May 2021 for the NSQ1 building at O’Callaghan Properties’ Navigation Square development in Cork city’s docklands. The French investor’s last purchase in Ireland before that saw it acquire Blackthorn House in Sandyford in south Dublin from Irish Life for about €18 million in May 2020.
Commenting on Corum’s latest acquisition, Siobhan Convery of Harvey said: “Units 20-29 Mervue Business & Technology Park tick a lot of boxes for the sophisticated investor. They’re located within an IDA park which is exceptionally well managed, while the tenants in both properties are very strong financially. Add to that the capital investment made in HID’s premises which is first-class. The reversionary potential from the rental streams of both tenants means that the equivalent yield profile of this investment looks even more attractive than the 7.2 per cent net initial yield that applied at the date of sale.”
Siobhan Convery of Harvey represented the vendor, while the purchaser was represented by Brian Gaffney of Murphy Mulhall.
