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Published in Commercial Property on 16/04/2020

Yew Grove ‘Insulated’ from Covid-19 Impact


CNI Editor reports

Yew Grove Reit said the majority of its tenants are either insulated from, or well able to get through, the impact of government restrictions aimed at controlling the spread of the coronavirus.

The commercial property firm mainly rents its buildings to the government and large corporations.

“The company has a strong balance sheet and sufficient liquidity to see it through and beyond the likely term of government-mandated quarantines,” said Jonathan Laredo, chief executive of Yew Grove.

“Our portfolio is over 89pc let, with the vast majority of our tenants either in businesses that are insulated from, or well able to get through, the effects of government actions to control the spread of contagion.”

Rent collection in the first three months of the year was “robust” and the management of Yew Grove expect 95pc of rents in the second quarter to be paid on time, according to a trading update.

The Government, foreign direct investment firms, and large businesses account for 95pc of the group’s rental income, with the remainder coming from small and medium firms (SMEs).

Yew Grove, which completed its €75m initial public offering (IPO) in 2018, said it is too early to say how the developments over the next few months will play out in the Irish commercial real estate market.

“At present the industrial sector, especially that part involved in the medtech sector and the pharmaceutical supply chain looks robust,” it said.

Meanwhile, the longer-term outlook remains “much as it was and is expected to be resilient” – as long as the pandemic does not cause a deep and more prolonged global downturn.

The company has a “substantial” pipeline of potential acquisitions, however it has now paused all buying activity until greater clarity emerges on the likely impact of the coronavirus on the market.

As of March 31, the group’s net debt stood at €32.8m. After capital commitments, Yew Grove has undrawn loan facilities of €8.7m and cash on deposit of €7.5m.

Earlier this week the board approved the payment of Yew Grove’s first quarterly interim dividend of 1.20 cents per ordinary share. Yew Grove expects to continue paying dividends throughout this year given its strong rental performance.

Colm Lauder, analyst at Goodbody Stockbrokers, said: “The declaration of the dividend and reaffirmation of intention to pay dividends quarterly makes Yew Grove a unique value play – given it is also trading at a 6pc discount to last reported EPRA NAV while offering a highly secure income stream.”

EPRA NAV is a standard measure of the operating performance of a property investment company.