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 Post subject: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 1:32 pm 
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A portfolio of 25 property investments, mainly in central Dublin and valued at close to €2 billion during the boom, are to be offered for sale on the international market at €140 million.
...
The portfolio is producing an overall rental income of €13.94 million, with more than 53 per cent of it coming directly from either central government or semi-state agencies. At the current asking price, a purchaser could expect an income yield of 9.53 per cent.

The buildings are concentrated within Dublin 1 and 7 (accounting for over 82 per cent of the rent) with the remainder in Dublin 2, 4, 8 and 20. The wide range of buildings has an overall floor area of around 50,769sq m (546,500sq ft) and includes 14 offices, 51 retail units and 31 apartments, all of them with the exception of two shops rented on 90 different tenancies. The overall price being quoted equates to a valuation of around €256 per sq ft (€2,755 per sq m).


http://www.irishtimes.com/business/sectors/commercial-property/140-million-for-25-city-centre-investments-1.1507179

€140m wouldn't even pay the 9% stamp duty on a €2bn portfolio.
Don't know if it was ever worth that much.
The market isn't down 93%.

Will still be interesting to see the prices achieved on this.


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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 1:34 pm 
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If I sell my car, without hurry, on the open market and get 5K, what would my car be valued at?

2billion me arse.


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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 1:35 pm 
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Speculator

Joined: Dec 5, 2010
Posts: 466
That must be an Anglo valuation, figures pulled from their arse.


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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 1:46 pm 
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and the portfolio is only worth what it is worth because of the rental contracts with Government.
When is Government going to look at the rents it pays for unexceptional properties.
This is office space. It's not specialized stuff.


Last edited by dipole on Wed Aug 28, 2013 1:48 pm, edited 1 time in total.

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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 1:47 pm 
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Too Big to Fail

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Price of 2bn against rental income of 14m would give 0.7% yield.
Price of 140m would give 10% yield.

Rents haven't come down much, have they?

I guess bubble valuations are by definition illogical, or it wouldn't be a bubble.

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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 1:52 pm 
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Eschatologist wrote:
Rents haven't come down much, have they?



Christ they have !
Prime commercial and retail are down 50% easily.

Rates on the other hand. :x


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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 1:57 pm 
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Posts: 466
dipole wrote:
and the portfolio is only worth what it is worth because of the rental contracts with Government.
When is Government going to look at the rents it pays for unexceptional properties.
This is office space. It's not specialized stuff.


but they can't change the UORR clauses in leases. Happy days for the landlord, i.e. NAMA.


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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 3:24 pm 
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Eschatologist wrote:
Price of 2bn against rental income of 14m would give 0.7% yield.
Price of 140m would give 10% yield.

Rents haven't come down much, have they?

I guess bubble valuations are by definition illogical, or it wouldn't be a bubble.

Or maybe the journalist got it wrong :)

Maybe he moved over from the Indo.

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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 8:09 pm 
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€140MM asking price is bullshit, it'll make a yield of 6%, possibly 5%; so then they can write an article saying *huge interest in Irish property, portfolio makes 50% over asking price* etc etc

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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 8:50 pm 
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Daniel Plainview wrote:
€140MM asking price is bullshit, it'll make a yield of 6%, possibly 5%; so then they can write an article saying *huge interest in Irish property, portfolio makes 50% over asking price* etc etc

Not so sure about that.

Prime investment property has been trading hands at yields of 8% to 10%.

If this sells for 5% odd than that is real yield compression or in other words prices have risen.

I still don't believe this portfolio was ever valued at €2 billion

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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 9:20 pm 
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Tax Avoider wrote:

but they can't change the UORR clauses in leases. Happy days for the landlord, i.e. NAMA.


It's BOSI so nothing to do with NAMA.

Nearly prime is nothing. Maybe it was valued at 2B, like on the 50 stories development potential at 500 euros a metre rental.

Looking at the properties involved, I can't imagine a huge amount of interest in this even at that yield.

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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 9:34 pm 
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Joined: Feb 22, 2009
Posts: 142
Who covers the gap? lol.


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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 10:07 pm 
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AKAF wrote:
Daniel Plainview wrote:
€140MM asking price is bullshit, it'll make a yield of 6%, possibly 5%; so then they can write an article saying *huge interest in Irish property, portfolio makes 50% over asking price* etc etc

Not so sure about that.

Prime investment property has been trading hands at yields of 8% to 10%.


Hmmm, really? Last I heard was prime, D2, good (BBB) tenant, 6.3% gross yield -- but it's not my area of expertise. So interested to hear if I'm wrong?

_________________
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(i.e. company profits are directly fed, in part, by government deficits)

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As confirmed by the Bank of England


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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Wed Aug 28, 2013 10:34 pm 
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Daniel Plainview wrote:
AKAF wrote:
Daniel Plainview wrote:
€140MM asking price is bullshit, it'll make a yield of 6%, possibly 5%; so then they can write an article saying *huge interest in Irish property, portfolio makes 50% over asking price* etc etc

Not so sure about that.

Prime investment property has been trading hands at yields of 8% to 10%.


Hmmm, really? Last I heard was prime, D2, good (BBB) tenant, 6.3% gross yield -- but it's not my area of expertise. So interested to hear if I'm wrong?


Aghh it's all convoluted.
Here's an example on Grafton Street ...

http://www.irishtimes.com/business/sectors/commercial-property/grafton-street-phone-store-on-market-for-5-5m-1.1385089

Quote:
The four-storey-over-basement building is let to Hutchinson 3G Ireland Ltd, trading as 3Mobile, on a 35-year full repairing and insuring lease that commenced on January 1st, 1991, and has another 12.5 years to run. Though the premises is currently over-rented at €445,000, the rent can be reviewed only on an upwards-only basis for the remainder of the lease.
Moreover, the lease is guaranteed by Hutchinson 3G UK Holdings with an additional bank guarantee equivalent to one year’s annual rent and outgoings payable by the tenant up to a maximum of €550,000.


So you're getting a return of 7.75% for the next 12.5 years, as long as the company doesn't go bust.

But if that were vacant today, you'd probably get half that.
So suddenly the yield could change to 3.875%.

Even if you get the full rent for the next 12.5 years, what happens after that ?
If rents haven't improved, you're now getting c€200k p/a.


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 Post subject: Re: €2 billion portfolio on market for €140 million
PostPosted: Thu Aug 29, 2013 12:07 am 
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mr_anderson wrote:
Daniel Plainview wrote:
AKAF wrote:
Daniel Plainview wrote:
€140MM asking price is bullshit, it'll make a yield of 6%, possibly 5%; so then they can write an article saying *huge interest in Irish property, portfolio makes 50% over asking price* etc etc

Not so sure about that.

Prime investment property has been trading hands at yields of 8% to 10%.


Hmmm, really? Last I heard was prime, D2, good (BBB) tenant, 6.3% gross yield -- but it's not my area of expertise. So interested to hear if I'm wrong?


Aghh it's all convoluted.
Here's an example on Grafton Street ...

http://www.irishtimes.com/business/sectors/commercial-property/grafton-street-phone-store-on-market-for-5-5m-1.1385089

Quote:
The four-storey-over-basement building is let to Hutchinson 3G Ireland Ltd, trading as 3Mobile, on a 35-year full repairing and insuring lease that commenced on January 1st, 1991, and has another 12.5 years to run. Though the premises is currently over-rented at €445,000, the rent can be reviewed only on an upwards-only basis for the remainder of the lease.
Moreover, the lease is guaranteed by Hutchinson 3G UK Holdings with an additional bank guarantee equivalent to one year’s annual rent and outgoings payable by the tenant up to a maximum of €550,000.


So you're getting a return of 7.75% for the next 12.5 years, as long as the company doesn't go bust.

But if that were vacant today, you'd probably get half that.
So suddenly the yield could change to 3.875%.

Even if you get the full rent for the next 12.5 years, what happens after that ?
If rents haven't improved, you're now getting c€200k p/a.


Thanks.
I'll check out Hutchison's CDS tomorrow and see what yield you get on that for comparison/adjustment.

_________________
Profits = Investment – Household Savings – Government Savings – Foreign Savings + Dividends

(i.e. company profits are directly fed, in part, by government deficits)

BANKS DON'T LEND RESERVES
As confirmed by the Bank of England


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