Only just dawned on me when posting the above that Stephen Vernon (Chairman of the Green REIT) who is a hardened and very wealthy Irish property investor who protected his position in the downturn, has only put a maximum of 10m in the Green REIT. Outside of the Green REIT, I have not seen Vernon make any other direct transactions in Irish commercial real estate? Clearly he sees more value being in the ‘business’ of earning fees from property than actually buying it. I hope that this time, we get loads of US / BRIC / International investors into these REITs rather than Irish (with associated bank borrowings).
irony of misspelling
“Hear hear” in a post about Ireland’s falling education standards actually reinforcing the point you wanted to make
On a more general point there is a shed load of investor money chasing commercial property in Dublin at the moment, it’s mostly seems to be focusing on prime office space in Dublin too. I’ve heard estimates of 6bn been bandied around which is a lot compared to recent turnover levels
Sales achieved prices are strongly exceeding valuations in many instances with very competitive bidding.
As with others above, I think the boat has sailed here.
Clearly buying a REIT at a premium to nav makes little sense if one desires to make an investment for rational reasons.
I think it would be real struggle to invest 300m odd unless a lot more product comes on the market
In a situation were almost every commercial real estate sale attracts +10 cash bids (no matter what size), do you want to be the one backing the jockey that already has you 30% down
(they should stop ramping these new REIT shares).
Dublin commercial agents are salivating at getting more REITs in as these guys just have to transact (i.e. cant go elsewhere for value).
Just look at Green in ARC portfolio - outbid slew of distressed funds, international REITS / quasi-REITS and rich locals (even Davys!)
(names were disclosed in this article)
Anyway, if they can get Mr and Mrs Wanatabe (or other International retail investor) into Irish real estate, good luck to them.
It is in all our interests (especially at these yields and with the quantum that banks need to off load).
As I reflect back on my thoughts on the Hibernia REIT above, perhaps the dumber the better in this regard.
Is this the last well hear of LuckyMe1?
If he manages to raise 350m with no track record of buying Irish property he is lucky!
I hope his investors feel the same from the experience.
LuckyMe1 wrote before he deleted it:
Just gets worse and again inspires reply for completeness:
First sentence goes to the heart of how inexperienced / naive this person is about both real estate and investing (reminds me of the kind of lines I used to hear from Anglo)
The four funds you mention - to their credit - did not buy in Ireland in the naughties and again - to their credit - spent a few years in Ireland, before buying, despite the fact that they have bought billions and billions of real estate all over the world. Even still Blackstone and Apollo have largely stopped bidding on Irish real estate outside of specific deals as the REITs have killed the returns vs risk taken. Starwood Europe spent 3 years doing no deals (missed the London market) and in a panic outbid most other funds by a big margin to win Aspen (although in hindsight was close to market rate today).
Paulson and Blackrock backed Green because Stephen Vernon is one of a finite group of actual Irish real estate investors who made large amounts of money and protected it. There is nobody in the Hibernia REIT line up remotely associated with making money in Irish real estate through the cycle. There are several with ‘chequered’ records in their involvement in the Irish banking collapse.
With enough ‘dumb’ US money I’m sure that ‘these guys’ wil buy everything offered at any price. You can get any list you want of assets coming from NAMA / Ulster etc - the trick is being able to make money on them given the 4.5% yields NAMA need in the western worlds most leveraged economy. But if you have already bought in Africa you are well used to this!
Please god the next generation in Ireland will produce it’s own Blackstone’s - hopefully however not using Mrs Murphy’s money !
Starwood completely fucked up with the lease on the Westin in Dublin in 2000. Cost them millions. Do I get a star Or Five
Reminds me of this:
Cheap money into Ireland would have lost its shirt previously if not bailed out. We can’t afford to do this second time around. Roll up, roll up. This bunch of second tier unproven nobodies will obviously be different.
You in a closed period btw? With all the posts and deletions?
Very good spot - in fairness Starwood Capital has struggled in the last few years
I remember someone trying to pump an AIM quoted company I knew about 10 years ago on a investor forum bulletin board, maybe advfn.com. It turned out to be a son of one of the directors. Not very savvy at all…
For the record it was actually a property company
The 2012 accounts for Bill Nowlan’s property enterprise. It’s a small endeavour.
I thought the Nowlans (as CEO and Chair) would have done 0.5m of the 3.5 that ‘management’ (aka Frank Kenny) put in. On the basis of these accounts, perhaps not.
Oh this gets better
I was looking through the Hibernia announcement on the 28th November 2013
For William Nowlans ‘real estate’ investing experience (the only person in Hibernia with experience related to Irish real estate, they list)
Those of us who do work in real estate in Ireland know that his claim to be part of the IPUT performance is akin to a technical sub-committee member of a plc claiming responsibility for the plc’s performance (I know the IPUT structure and set up well). Don’t know about the Irish Life set up but the ‘careful’ wording of his actions being ‘subject to William Nowlan’s investment recommendations’’ leads me to believe that he was in the same set up as IPUT (a sub-committee member giving technical surveyor views).
It got me thinking about how this group of people have managed to get commitments of 124m without any real estate investing experience in Ireland and with a potential target of using debt of 50% of LTV (giving matches to the children).
Someone who I know understands the system here a lot better than me told me that William Nowlan was one of the main drafters of Irish REIT legislation for the Government. The Green REIT has turned out to be a huge success for the Government. Not because that it is there, but because the Government - who is exposed to tens of billions in commercial real estate (banks, NAMA etc.) - now have a metric which they might be able to support (manipulate) on the Bloomberg screen with modest amounts of money (about 200k in daily deal value). The ECB have already been alerted to the fact that ‘the market’ considers Irish real estate to be 30% undervalued vs. current transactions using the Green REIT as evidence (i.e. the ‘hole’ in NAMA is not so bad). Perhaps it is unlikely that you will see the Green REIT fall below 1.20 for long despite the fact that investors in it are now buying at equivalent prime Dublin yields of c. 3.5%. On the back of this un-anticipated benefit, the Government (through some branch of it like NPRF, NewERA, other internal fund) is potentially the ‘anchor’ investor in the Nowlan’s venture as a thank you. Unfortunately, this paragraph will have to go into the ‘unsubstantiated anecdote’ / ‘complete lies’ box.
In an interview like that he can’t really say anything differently even if he had foreseen it - KPMG are a professional services firm so their MP is not going to win any favours by talking about the economy crashing. If he says the economy is screwed then he gets a lot of angry phone calls.
And what exactly will our “product” be, pray tell? Seats for US multinations to place imported bums in?
What do you call an eejit that invests in Irish REITs? A REIT feckin’ eejit.
Keep digging ‘Bally Boy’ / ‘LuckyMe1’
If you had a working knowledge of the Irish real estate market you would realise that the Internationals buying +2m houses in Dublin (and getting permits) are mostly from the UK cashing out of the London market but not wanting to go too far from home. Haven’t - yet - met too many Chinese but maybe they will use your REIT (but don’t forget to tell them that they can’t sleep in it!).
Instead of ‘spoofing’ about your understanding of Irish real estate, get people who have ‘proven and authentic’ records of ‘Irish real estate’ investing (they are out there), and a Board (Barrington aside), not contanimated by the the downturn / bank crisis, and start from a good position. You avoid arguments as (per your past guise on the PIN) that Irish REITs are such no brainers / Ireland is the same as Africa etc that a monkey can do it. We tried that in the naughties. Results weren’t good (especially as I see that you are going to use 50% debt in a REIT?)