Investment Policy

The Company will pursue its investment objectives by investing in a diversified portfolio of Irish commercial property.

 

In building the Portfolio, the Directors pay particular focus to Well-tenanted Commercial Real Estate located in the Geographic Target Market. The Company has defined each of those elements as follows.

  • Well-tenanted Commercial Real Estate: The Company considers this to primarily comprise commercial real estate assets in Ireland, with a particular focus on office and industrial assets let to Irish government entities and other State Bodies, IDA Ireland supported and other FDI companies, and larger corporates.
  • Geographic Target Market: The Company’s principal focus is on property located (a) in Dublin city (other than the traditional Dublin CBD of Dublin 2 and 4); (b) within the Dublin Catchment Area (an area of 30 minutes drive from the M50); (c) in major regional cities and towns (especially those identified as hubs for industrial development under Project Ireland 2040); and (d) in IDA Ireland Business and Technology Parks. The Company will determine whether a property is within the Geographic Target Market at the time of investment only. The Company seeks to spread investment risk by investing in different types of Well-tenanted Commercial Real Estate across the Geographic Target Market. Although the Company has not set any maximum exposures or weightings, the Directors will make investments which will allow the Company, to comply with the following restrictions.
  • No single property will exceed 25 per cent. of the total assets of the Company.
  • The income receivable from one tenant or from tenants within the same group (in each case other than State Bodies) will not exceed 35 per cent. of the total rental income of the Company in a particular financial year
  • At least 90 per cent. of the total assets of the Company will be invested in office, industrial and related assets. The Company will not invest in residential assets, un-zoned land, shopping centres, retail parks, high-street shops, nursing homes, primary care facilities or other medical facilities, hotels or hospitality assets unless such assets are included in a primarily industrial or office investment, and will then only do so where such assets represent less than 20 per cent. of total rental income of that investment.
  • No more than 20 per cent. of the total assets of the Company may be invested in properties outside the Geographic Target Market.
  • The Company will typically require that tenants have occupancy arrangements in respect of a property of not less than three years (measured on a weighted average basis where there is a portfolio acquisition or multi-tenanted property) and that the tenant is responsible for payment of all costs in respect of management and maintenance of the property. However, this requirement may be relaxed by the Management Team in light of the value a particular property may contribute to the Portfolio in the longer term.
  • For the avoidance of doubt, the Company is not required to dispose of any investment or to rebalance the Portfolio as a result of, for example, a change in the respective valuations of its assets, the merger of tenants or changes in the rental income of a property or development.
  • The Company may also acquire non-performing commercial real estate loans which are secured over a property which meets the Company’s investment criteria. For the avoidance of doubt, the Company is not permitted to acquire any loan interest or interest in a security granted over a property where the borrower under such loan is expected to continue to meet its obligations under such loan and/or security unless the loan is specifically connected to a property being acquired and is incidental to and/or a part of the rent receivable from that property. The Company will not invest in other investment companies or funds (other than money market funds in accordance with its cash management policy). However, the Company may hold properties through special purpose vehicles and is permitted to invest in joint venture companies and co-investment vehicles which hold real estate assets directly.

The Company is also permitted to forward finance properties where (a) there is an agreement with a tenant to lease the property upon completion of the works, the quality of which is determined to be aligned with the Company’s investment criteria; (b) planning permission has been granted in respect of the property; and (c) the aggregate forward finance arrangements entered into by the Company do not exceed 20 per cent. of the Company’s total assets at the time of entering into the relevant forward financing arrangement.

 

The Company may from time to time, undertake planning, intensification, unit consolidation, unit division, modernisations, and redevelopments in respect of properties, where the Directors believe it will enhance future income generation and capital values. The Company will not, however, be entitled to acquire land for speculative development of offices or industrial assets except where it forms part of the demise of a property that otherwise satisfies the Company’s investment criteria.

 

Gearing

The Company will seek to use gearing to enhance investment returns. Aggregate borrowings are not expected to exceed a REIT LTV Ratio of 25 per cent. The Directors intend to maintain gearing at all times well within the thresholds stipulated by the Irish REIT Regime, namely an overall REIT LTV Ratio of 50 per cent., and a debt service minimum ratio of 1.25:1 for Property Income plus Finance Costs to Finance Costs.

 

Use Of Derivatives

The Company may use derivatives for efficient portfolio management, and in particular, it may engage in full or partial interest rate hedging or otherwise seek to mitigate the risk of interest rate increases on borrowings. The Company will not enter into derivative transactions for speculative purposes.

 

Cash management policy

Cash held for working capital purposes or received by the Company pending reinvestment or distribution will be held on its behalf in Euro only and invested in cash, cash equivalents, near cash instruments and money market instruments.

 

REIT status

The Directors will at all times conduct the affairs of the Company so as to enable it, to the extent possible, to comply with the Irish REIT Regime.

 

Changes to, and breach of, the investment policy

Any material amendment to the investment policy will only take place with the approval of Shareholders. If there is any breach of the Company’s investment policy, the Company will announce details of that breach and the remedial action it proposes to take in order to rectify it through a Regulatory Information Service.