U+I chief: Dublin is seen as ‘proper place to deploy capital’
The chief executive of property group U+I, Matthew Weiner, has dismissed concerns within the real estate industry over the potential negative impact the Government’s review of tax structures used by international investors to acquire Irish real estate assets will have.
Speaking to the Irish Independent following the publication of U+I’s latest interim results, Weiner said while anything that affected liquidity and transparency could make a difference, he believed Dublin presented a sufficiently strong investment proposition to outweigh “anything at the margins on tax”.
He said: “We [in U+I] don’t use any of those [tax] structures. I think the most important thing is Dublin’s on the way up, and there’s a lot of capital that says it wants a Dublin holding. It wouldn’t have said that 10 years ago. I think that outweighs anything at the margins on tax. If you look at the quality of the capital that’s been bidding on some of the larger lot sizes in Dublin, I think it’s really encouraging.”
Pointing to the example of the Vertium building on Dublin’s Burlington Road, which U+I is delivering in a joint venture with Johnny Ronan’s RGRE, property investor Paddy McKillen and Colony Capital, Weiner said the funding provided by Union Investment was indicative of the standing Dublin now enjoyed internationally.
“We always said that when we bought [the former] Burlington House originally, we thought it would be the way international capital came into the market. Union bought the buildings in the [Dublin] docks and then they funded up the Vertium. They wouldn’t have had Dublin on their list 10 years ago. Now Dublin competes with Amsterdam, Berlin, London, Paris, Frankfurt as a proper place to deploy capital,” he said.
The Vertium represents a particular success story for U+I. Due for completion in 2017, the 15,992sq m (172,000sq ft) property has already been pre-let to online retail giant Amazon at a blended rent of approximately €50 per sq ft.
Asked if U+I was looking at other opportunities in Dublin, Weiner said: “We would look at refurbishment opportunities rather than ‘ground-up’ rebuild. Speed of delivery is important. I like some of the buildings that are available in Dublin at the moment where you can extend a little and deliver a lot quicker.”
In its latest interim results, U+I posted an Stg£11.5m (€12.8m) gain in developments and trading during the first half of the year, pushing it ahead of the original Stg£8m guidance set at the start of the year. U+I, which was formed through the combination of Cathedral Group and Development Securities, also secured a further Stg£11m in development and trading gains since August, rising to Stg£22.5m for the year. Despite the Brexit backdrop, the company is tipping its development and trading gains for the year to reach between Stg£35m and Stg£40m.
The firm has progressed a number of Dublin developments, with planning secured for a complete refurbishment at Donnybrook House in Dublin 4 and for 147 apartments at ‘The Avenue’ in Sandyford. All apartment units are sale agreed at Percy Place, with commercial space sold to Irish Life.