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Wednesday 14 August, 2019

Henderson Park

RECOMMENDED CASH OFFER FOR GREEN REIT PLC

RNS Number : 9908I
Henderson Park
14 August 2019
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT IS BEING MADE PURSUANT TO RULE 2.5 OF THE IRISH TAKEOVER RULES

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

14 August 2019

RECOMMENDED CASH OFFER

FOR

GREEN REIT PLC

BY

HPREF DUBLIN OFFICE BIDCO LIMITED

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF

THE HENDERSON PARK FUNDS

TO BE IMPLEMENTED BY WAY OF A SCHEME OF ARRANGEMENT UNDER CHAPTER 1 OF PART 9 OF THE COMPANIES ACT 2014

Summary

·    Henderson Park Real Estate Management Limited ("Henderson Park"), in its capacity as investment manager to Henderson Park Real Estate Fund I US LP, Henderson Park Real Estate Fund I Non US LP, Henderson Park Real Estate Fund I TE LP and Henderson Park Real Estate Fund I US TE LP (collectively the "Henderson Park Funds"), and Green REIT plc ("Green REIT" or the "Company") are pleased to announce that they have reached agreement on the terms of a cash offer by Henderson Park which has been unanimously recommended by the Independent Green REIT Board, pursuant to which HPREF Dublin Office Bidco Limited ("Bidco"), an indirect wholly‑owned subsidiary of the Henderson Park Funds, will acquire the entire issued and to be issued share capital of Green REIT.

·    Under the terms of the Acquisition, Green REIT Shareholders will be entitled to receive:

for each Green REIT Share €1.9135 in cash

·    The Acquisition values the entire issued and to be issued share capital of Green REIT at approximately 1.34 billion.

·    The Acquisition represents a premium of approximately:

24.7% to Green REIT's undisturbed closing share price of €1.534 on 12 April 2019 (being the last Business Day prior to the announcement of the commencement of a sales process for Green REIT on 15 April 2019);

32.5% to Green REIT's volume weighted average share price of approximately €1.444 over the 180 trading day period ending on 12 April 2019;

4.9% to Green REIT's closing share price of €1.824 on 13 August 2019 (being the last Business Day prior to the publication of this Announcement); and

2.3% to Green REIT's EPRA NAV per Green REIT Share as at 30 June 2019, based on the independent valuation of Green REIT's assets by the Valuers as at 30 June 2019.

·    Commenting on the Acquisition, Nick Weber, Founding Partner and CEO of Henderson Park, said:

"The acquisition of Green REIT offers a rare opportunity to invest in a large institutional quality office portfolio and a strategic logistics park through a single transaction. The portfolio offers exposure to high-quality properties located predominantly in Dublin, leased to blue chip tenants, and two strategic development sites. We believe in the short-term and long-term prospects of the Irish market with its strong macroeconomic backdrop and underlying real estate fundamentals."

·    Commenting on the Acquisition, Gary Kennedy, Chair of Green REIT, said:

"Green REIT has been trading at a persistent structural discount to its underlying Net Asset Value since early 2016. This persistent discount has been inconsistent with the value of the Company's assets, management, business plan and performance as well as the Irish commercial property sector.  Having undertaken a detailed strategic analysis, the Board determined that it was in the interests of shareholders to conduct a sale process to solicit offers for the Company or its assets. Following a highly competitive process, the cash offer by Henderson Park to acquire the Company represents an attractive outcome for shareholders delivering a premium to the share price prior to the announcement of the sale process and to Green REIT's Net Asset Value."

·    It is intended that the Acquisition will be implemented by means of a High Court sanctioned scheme of arrangement under Chapter 1 of Part 9 of the Act (or, if Henderson Park elects, subject to the terms of the Transaction Agreement, compliance with the Irish Takeover Rules and with the consent of the Irish Takeover Panel, a Takeover Offer). 

·    The Acquisition is conditional on, among other things, (i) the approval by Green REIT Shareholders of the Scheme Meeting Resolution and the EGM Resolutions; (ii) the sanction of the Scheme and the confirmation of the Reduction of Capital by the High Court; and (iii) receipt of any necessary regulatory or other approvals.  

·    Having taken into account the relevant factors and applicable risks, the Independent Green REIT Board, which has been so advised by J.P. Morgan Cazenove, as lead financial adviser to Green REIT, and Davy as joint financial adviser and Rule 3 adviser to Green REIT, as to the financial terms of the Acquisition, considers the terms of the Acquisition as set out in this Announcement to be fair and reasonable.  In providing its advice to the Independent Green REIT Board, J.P. Morgan Cazenove and Davy have taken into account the commercial assessments of the Independent Green REIT Directors.  Accordingly, the Independent Green REIT Board unanimously recommends that Green REIT Shareholders vote in favour of the Acquisition and all of the Resolutions, as they have irrevocably committed to do in respect of their own beneficial holdings of, in aggregate, 389,850 Green REIT Shares which represent approximately 0.056% of the issued share capital of Green REIT as of 13 August 2019 (being the latest practicable date prior to the publication of this Announcement). 

·    The Scheme Document, which will contain, amongst other things, further information about the Acquisition, notices convening the Scheme Meeting and the Extraordinary General Meeting, the expected timetable for completion and action to be taken by Green REIT Shareholders, will be published as soon as practicable and, in any event (save with the consent of the Irish Takeover Panel), within 28 days of this Announcement.  It is anticipated that the Scheme will, subject to obtaining the necessary regulatory approvals, be declared effective in November 2019.

About Henderson Park and Bidco

The Henderson Park Group is a European real estate asset and investment management platform.  Henderson Park is recognised as a reliable, solution-driven counterparty for sellers through its ability to underwrite, structure, access funding and successfully complete complex real estate investments in Europe across various asset classes and situations. 

Discretionary funds advised by Henderson Park are currently capitalised in excess of $3.2 billion of equity, of which circa $1.5 billion is immediately available to be invested.

Bidco is a newly incorporated Irish company established for the purposes of undertaking the Acquisition. Bidco is a wholly owned indirect subsidiary of the Henderson Park Funds.

About Green REIT

Green REIT plc is an Irish REIT and is listed on the Irish and London Stock Exchanges. The Company was the first REIT established in Ireland following the introduction of REIT legislation by the Irish Government. The Company's stated strategy is to create a property portfolio consisting primarily of commercial property in Ireland to deliver income and capital growth through opportunistic investments, active property management and prudent use of debt finance.

This summary should be read in conjunction with the full text of the following Announcement and its appendices. 

The Conditions to, and certain further terms of, the Acquisition are set out in Appendix I to this Announcement and the Acquisition is subject to further terms to be set out in the Scheme Document.  Certain terms used in this Announcement are defined in Appendix II to this Announcement.  Appendix III to this Announcement contains certain sources of information and bases of calculation contained in this Announcement.  Appendix IV to this Announcement contains the opinions of Green REIT's independent valuers in respect of certain asset valuations given in this Announcement.

This Announcement contains inside information and has been issued pursuant to Article 2.1(b) of Commission Implementing Regulation (EU) 2016/1055.  The date and time of this Announcement is the same date and time that it has been communicated to the media.

Enquiries:

 

J.P. Morgan Cazenove (Lead Financial Adviser and Corporate Broker to Green REIT)

 

Bronson Albery / Paul Hewlett / David Connern

Tel: +44 207 742 4000

Davy (Joint Financial Adviser and Corporate Broker to Green REIT)

 

Ronan Godfrey / Brian Garrahy

Tel: +353 1 679 7788

CBRE Indirect Investment Services Limited (Property Adviser to Green REIT)

 

Stephen Hubbard / Chris Brett / Mark Evans

Tel: +44 207 182 2000

Green REIT Press enquiries

 

Drury | Porter Novelli

 

Billy Murphy

 

 

Eastdil Secured (Financial Adviser to Henderson Park)

James McCaffrey / Max von Hurter

 

Wells Fargo Securities (Financial Adviser to Henderson Park)

Sam Small / Chris Tucker

Tel: +353 1 260 5000 /
+353 87 231 3085

 

 

Tel: +44 (0)20 7074 4950

 

 

Tel: +44 (0)20 3942 8000

Henderson Park Press enquiries

FTI Consulting (International)

 

 

Richard Sunderland

Tel: +44 (0)20 3727 1000

 

 

       

Statements required by the Irish Takeover Rules

The Henderson Park Directors and the Bidco Directors accept responsibility for the information contained in this Announcement other than that relating to Green REIT, the Green REITGreen REIT Directors and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the Henderson Park Directors and the Bidco Directors (who, in each case, have taken all reasonable care to ensure that this is the case) the information contained in this Announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

The Green REIT Directors accept responsibility for the information contained in this Announcement relating to Green REIT, the Green REIT Group and the Green REIT Directors and members of their immediate families, related trusts and persons connected with them, except for the recommendation and related opinions of the Independent Green REIT Board.  The Independent Green REIT Board accept responsibility for the recommendation and related opinions of the Independent Green REIT Board contained in this Announcement.  To the best of the knowledge and belief of the Green REIT Directors and the Independent Green REIT Directors (who, in each case, have taken all reasonable care to ensure such is the case), the information contained in this Announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

J.P. Morgan Securities plc, which conducts its UK and Ireland investment banking business as J.P. Morgan Cazenove, is authorised by the PRA and regulated by the PRA and the FCA. J.P Morgan Cazenove is acting as financial adviser exclusively for Green REIT and no one else in connection with the Acquisition and the matters set out in this Announcement. In connection with such matters, J.P. Morgan Cazenove, its affiliates and their respective partners, directors, officers, employees and agents will not regard any person other than Green REIT as their client, nor will they be responsible to anyone other than Green REIT for providing the protections afforded to their clients or for providing advice in relation to the Acquisition, the contents of this Announcement or any other matter referred to in this Announcement.

Davy, which is authorised and regulated in Ireland by the Central Bank of Ireland, is acting exclusively for Green REIT and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than for providing the protections afforded to clients of Davy or for providing advice in connection with the matters referred to in this Announcement.

"Wells Fargo Securities" and "Eastdil Secured" are both trading names of Wells Fargo Securities International Limited. Wells Fargo Securities International Limited is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom. Wells Fargo Securities International Limited (trading as "Wells Fargo Securities" and "Eastdil Secured") is acting exclusively as financial adviser to Henderson Park and Bidco and will not be responsible to anyone other than Henderson Park and Bidco for providing the protections afforded to its clients, or for providing advice in relation to the matters set out in this Announcement.

Arthur Cox is acting as legal adviser to Green REIT and A&L Goodbody is acting as legal adviser to Henderson Park and Bidco.

This Announcement is for information purposes only and is not intended to, and does not, constitute or form any part of any offer or invitation, or the solicitation of an offer, to purchase or otherwise acquire, subscribe for, sell or otherwise dispose of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.  The Acquisition will be made solely by means of the Scheme Document (or, if applicable, the Takeover Offer Document), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition.  Any decision in respect of, or other response to, the Acquisition, should be made only on the basis of the information contained in the Scheme Document (or, if applicable, the Takeover Offer Document).

This Announcement does not constitute a prospectus or a prospectus equivalent document.

This Announcement has been prepared for the purpose of complying with the laws of Ireland and the Irish Takeover Rules and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of Ireland.

Cautionary Statement Regarding Forward-Looking Statements

This Announcement contains certain forward-looking statements with respect to Henderson Park, Bidco and Green REIT. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts.  Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "believe", "will", "may", "would", "could" or "should" or other words of similar meaning or the negative thereof.  Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, economic performance, financial conditions, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of the operations of the Henderson Park Group or the Green REIT Group; and (iii) the effects of government regulation on the business of the Henderson Park Group or the Green REIT Group.

These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements.  These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future.  You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  All subsequent oral or written forward-looking statements attributable to Henderson Park, Bidco or Green REIT or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above.  Neither Henderson Park, Bidco nor Green REIT undertake any obligation to update publicly or revise forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

Disclosure requirements of the Irish Takeover Rules

Under the provisions of Rule 8.3 of the Irish Takeover Rules, if any person is, or becomes, 'interested' (directly or indirectly) in, 1% or more of any class of 'relevant securities' of Green REIT, all 'dealings' in any 'relevant securities' of Green REIT (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by not later than 3.30 pm (Irish time) on the 'business day' in Dublin following the date of the relevant transaction.  This requirement will continue until the date on which the 'offer period' ends.  If two or more persons co-operate on the basis of any agreement, either express or tacit, either oral or written, to acquire an 'interest' in 'relevant securities' of Green REIT, they will be deemed to be a single person for the purpose of Rule 8.3 of the Irish Takeover Rules.

Under the provisions of Rule 8.1 of the Irish Takeover Rules, all 'dealings' in 'relevant securities' of Green REIT by Henderson Park, or by any party Acting in Concert with Henderson Park, must also be disclosed by no later than 12:00 noon (Irish time) on the business day in Dublin following the date of the relevant transaction. 

A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, can be found on the Irish Takeover Panel's website at www.irishtakeoverpanel.ie. 

'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities.  In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Irish Takeover Rules, which can also be found on the Irish Takeover Panel's website.  If you are in any doubt as to whether or not you are required to disclose a dealing under Rule 8, please consult the Irish Takeover Panel's website at www.irishtakeoverpanel.ie or contact the Irish Takeover Panel on telephone number +353 1 678 9020.

No profit forecast or merger benefit statement

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share, for Henderson Park, Bidco or Green REIT, respectively for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Henderson Park, Bidco or Green REIT, respectively.  No statement in this Announcement constitutes an estimate of the anticipated financial effects of the Acquisition.

Right to switch to a Takeover Offer

Bidco reserves the right to elect, subject to the terms of the Transaction Agreement, compliance with the Irish Takeover Rules and with the consent of the Irish Takeover Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued share capital of as an alternative to the Scheme.  In such an event, the Takeover Offer will be implemented on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Scheme and subject to the amendments referred to in Appendix I to this Announcement and in the Transaction Agreement.

Publication on website

Pursuant to Rules 2.6(c) and 19.9 of the Irish Takeover Rules, this Announcement will be made available (including to Henderson Park's employees) on Henderson Park's website (www.greenreitbidcoinfo.com) and on Green REIT's website (www.greenreitplc.com) by no later than 12:00 noon on the Business Day following this Announcement.

Neither the content of any such website nor the content of any other website accessible from hyperlinks on such website is incorporated into, or forms part of, this Announcement.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments.  Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Valuations

As at 30 June 2019, Green REIT's property portfolio was independently valued (within the meaning of Rule 29.1(a) of the Irish Takeover Rules) at approximately €1.557 billion. The valuation reports of the Valuers required in accordance with Rule 29 of the Irish Takeover Rules in connection with this valuation are included in Appendix IV.  Each Valuer has:

·          given and not withdrawn its written consent to the inclusion of its name and of its property valuation report in this Announcement in the form and context in which they appear; and

·          confirmed that an updated valuation as at the date of this Announcement would not be materially different to the valuation as at 30 June 2019 contained within its property valuation report.

In accordance with Rule 29.3 of the Irish Takeover Rules, if the Properties were to be sold at the values stated, the Green REIT Directors estimate that the potential tax liability that would arise would be approximately €16.2 million.  If the Properties were sold by Green REIT at the date of this Announcement, the Green REIT Directors consider it likely that this liability would arise, however the Directors have no current intention to sell the Properties. For the avoidance of doubt, the proposed Acquisition of Green REIT by way of the Scheme will not constitute a sale of the individual Properties but rather will constitute the acquisition of the entire issued and to be issued share capital of Green REIT by Bidco.

General

The laws of certain jurisdictions may affect the availability of the Acquisition to persons who are not resident in Ireland or the United Kingdom.  Persons who are not resident in Ireland or the United Kingdom, or who are subject to laws of any jurisdiction other than Ireland or the United Kingdom, should inform themselves about, and observe, any applicable legal or regulatory requirements.  Any failure to comply with any applicable legal or regulatory requirements may constitute a violation of the laws and/or regulations of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility and liability for the violation of such restrictions by any person.

The Acquisition will not be made available, directly or indirectly, in any Restricted Jurisdiction, and the Acquisition will not be capable of acceptance from within a Restricted Jurisdiction. 

The release, publication or distribution of this Announcement in or into certain jurisdictions may be restricted by the laws of those jurisdictions.  Accordingly, copies of this Announcement and all other documents relating to the Acquisition are not being, and must not be, released, published, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction.  Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions.  Failure to do so may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, Henderson Park and Green REIT disclaim any responsibility or liability for the violations of any such restrictions by any person.

 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT IS BEING MADE PURSUANT TO RULE 2.5 OF THE IRISH TAKEOVER RULES

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

14 August 2019

RECOMMENDED CASH OFFER

FOR

GREEN REIT PLC

BY

HPREF DUBLIN OFFICE BIDCO LIMITED

AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF

THE HENDERSON PARK FUNDS

TO BE IMPLEMENTED BY MEANS OF A SCHEME OF ARRANGEMENT UNDER CHAPTER 1 OF PART 9 OF THE COMPANIES ACT 2014

1.         Introduction

The Board of Directors of Henderson Park and the Independent Green REIT Board are pleased to announce that they have reached agreement on the terms of a cash offer which has been unanimously recommended by the Independent Green REIT Board, pursuant to which Bidco, an indirect wholly-owned subsidiary of the Henderson Park Funds, will acquire the entire issued and to be issued share capital of Green REIT, which will be implemented by means of a scheme of arrangement under Chapter 1 of Part 9 of the Act.

2.         Summary Terms of the Acquisition

The Acquisition is subject to the Conditions set out in Appendix I to this Announcement and to be set out in the Scheme Document. 

Under the terms of the Acquisition, Green REIT Shareholders will be entitled to receive:

for each Green REIT Share €1.9135 in cash

The Acquisition values the entire issued and to be issued share capital of Green REIT at approximately €1.34 billion. The Acquisition represents a premium of approximately:

24.7% to Green REIT's undisturbed closing share price of €1.534 on 12 April 2019 (being the last Business Day prior to the announcement of the commencement of a sale process for Green REIT on 15 April 2019);

32.5% to Green REIT's volume weighted average share price of approximately €1.444 over the 180 trading day period ending on 12 April 2019;

4.9% to Green REIT's closing share price of €1.824 on 13 August 2019 (being the last Business Day prior to the publication of this Announcement); and

2.3% to Green REIT's EPRA NAV per Green REIT Share as at 30 June 2019, based on the independent valuation of Green REIT's assets by the Valuers as at 30 June 2019.

Under the terms of the Scheme proposed to implement the Acquisition, in consideration of these payments, Green REIT Shares will be cancelled and Green REIT will issue new Green REIT Shares to Bidco. 

The sources and bases of information contained in this Announcement to calculate the implied value of the Acquisition are set out in Appendix III.

3.         Green REIT Background to and Reasons for Recommending the Acquisition

Since Green REIT's initial public offering in July 2013, the Company has focused on delivering attractive risk-adjusted returns to shareholders through investing in, and developing, high quality commercial real estate, and active asset management. Green REIT's strategy of developing the highest quality office buildings in prime locations in Dublin continues to attract high calibre tenants.

The Company has delivered strong income and development returns, driven by the robust performance of Ireland's economy. This is underpinned by Dublin's appeal as a business location for international firms, steady employment growth, and rising consumer demand. Over a six year period to 30 June 2019, Green REIT has nearly doubled its EPRA NAV per share from 96.7c to 187.1c. Total shareholder return over the same period was 109%, compared to 27% for the FTSE 350 Real Estate Super Sector and 62% for ISEQ.

On 15 April 2019, following a comprehensive and carefully considered review of strategic options available to maximise value for Green REIT Shareholders, the Green REIT Board announced that it had taken the decision to initiate a process for the sale of Green REIT or its portfolio of assets.

This decision was taken in response to the persistent and perceived structural discount in Green REIT's share price relative to its underlying Net Asset Value. The Green REIT Board felt this discount was inconsistent with the value of the Company's assets, management, and business plan, as well as the Irish commercial real estate sector. Green REIT's share price has largely traded at a discount to the EPRA NAV of its assets since February 2016, yet in the same period the Company has demonstrated its ability to realise value from asset disposals, such as the Westend Retail Park and the Parkway Retail Park, at values close, or at a premium, to the most recent valuations.  Consequently, a decision was taken to investigate whether a third party would make an offer to acquire the entire issued and to be issued share capital of Green REIT or its portfolio of assets, to deliver the underlying value of the business and portfolio of assets upfront in cash to Green REIT Shareholders.

The Green REIT Board conducted a full and thorough sale process to solicit possible offers for the Company or its portfolio of assets. Initial proposals were received based upon publicly available information, with three high-quality parties invited to carry out further due diligence and submit "best and final" bids by Thursday 25 July 2019.

As Stephen Vernon and Pat Gunne are Chair and Chief Executive Officer of Green Property REIT Ventures DAC, the investment manager of the Company and the largest shareholder in the Company, the Independent Green REIT Board, comprising all of the directors of the Company excluding Mr Vernon and Mr Gunne, was formed for the purposes of advising shareholders in relation to the sale process.  In addition, at the outset of the sale process, Mr Vernon and Mr Gunne informed Green REIT that neither they, nor the Investment Manager, would make an offer to acquire the Company nor would they otherwise directly or indirectly participate in any third party offer to acquire the Company.

As announced on 31 July 2019, Green REIT received a number of proposals and the Independent Green REIT Board assessed these in detail with the assistance of its advisers. The Independent Green REIT Board believes that the Acquisition represents the most attractive proposal for the Company and its shareholders in all respects, delivering a significant premium to Green REIT's share price prior to the announcement of the sale process as well as a premium to Green REIT's last reported Net Asset Value as at 30 June 2019.

In recommending the Acquisition, the Independent Green REIT Board has taken into account a number of factors, including the following:

·    Henderson Park's proposal to implement the Acquisition was received and considered by the Independent Green REIT Board following a full and thorough sale process involving a number of interested parties;

·    the Acquisition allows Green REIT Shareholders to realise their full investment in Green REIT for cash at an attractive valuation, which recognises Green REIT's prospects and the quality of its underlying portfolio of assets;

·    the certainty provided to Green REIT Shareholders by delivering upfront in cash the underlying value of the business and portfolio of assets on completion; and

·    the Acquisition implies:

a 24.7% premium to Green REIT's undisturbed closing share price of €1.534 on 12 April 2019 (being the last Business Day prior to the announcement of the commencement of the sale process on 15 April 2019);

a 32.5% premium to Green REIT's volume weighted average share price of approximately €1.444 over the 180 trading day period ending on 12 April 2019;

a 4.9% premium to Green REIT's closing share price of €1.824 on 13 August 2019 (being the last Business Day prior to the publication of this Announcement); and

a 2.3% premium to Green REIT's EPRA NAV per Green REIT Share as at 30 June 2019, based on the independent valuation of Green REIT's assets by the Valuers as at 30 June 2019.

4.         Recommendation of Independent Green REIT Board

Having taken into account the relevant factors and applicable risks, the Independent Green REIT Board, which has been so advised by J.P. Morgan Cazenove, as lead financial adviser to Green REIT, and Davy, as joint financial adviser and Rule 3 adviser to Green REIT, as to the financial terms of the Acquisition, considers the terms of the Acquisition as set out in this Announcement to be fair and reasonable.  In providing its advice to the Independent Green REIT Board, J.P. Morgan Cazenove and Davy have taken into account the commercial assessments of the Independent Green REIT Directors.  Accordingly, the Independent Green REIT Board unanimously recommends that Green REIT Shareholders vote in favour of the Acquisition and all of the Resolutions, as they have irrevocably committed to do in respect of their own beneficial holdings of, in aggregate, 389,850 Green REIT Shares which represent approximately 0.056% of the issued share capital of Green REIT as of 13 August 2019 (being the latest practicable date prior to the publication of this Announcement). 

5.         Henderson Park Background to and Rationale for the Acquisition

Henderson Park has identified Ireland as a key investment market, in which it is seeking to deploy capital, encouraged by Ireland's strong underlying macroeconomic and real estate fundamentals. In particular, Henderson Park has been focused on sourcing opportunities in Dublin, where the market is benefiting from the Irish capital's continued growth as a destination for global corporates seeking a European presence which, in recent years, has translated into strong occupier demand for office space, a reduction in vacancy rates and an increase in rental values. Dublin and other Irish cities like Cork have increasingly attracted institutional real estate investors looking to gain exposure to positive short- to medium-term economic prospects, with Ireland expected to experience GDP growth above the EU average over the next two to three years.

6.         Irrevocable Commitments

Bidco has received irrevocable undertakings from each of the Independent Green REIT Directors to vote in favour of the Scheme at the Scheme Meeting and each of the EGM Resolutions to be proposed at the Extraordinary General Meeting in respect of their own beneficial holdings of, in aggregate, 389,850 Green REIT Shares which represent approximately 0.056% of the issued share capital of Green REIT as of 13 August 2019 (being the latest practicable date prior to the publication of this Announcement).

In addition, Bidco has received irrevocable undertakings from Mr Stephen Vernon and Mr Pat Gunne, being the non-Independent Non-Executive Directors, and entities related to them, to vote in favour of the Scheme at the Scheme Meeting and each of the EGM Resolutions to be proposed at the Extraordinary General Meeting in respect of an aggregate of 10,176,500 Green REIT Shares, representing approximately 1.46% of the issued share capital of Green REIT as of 13 August 2019.

In addition, Bidco has also received irrevocable undertakings from the Investment Manager to vote in favour of the Scheme at the Scheme Meeting and each of the EGM Resolutions to be proposed at the Extraordinary General Meeting in respect of an aggregate of 32,499,942 Green REIT Shares representing approximately 4.65% of the issued share capital of Green REIT as of 13 August 2019. 

Therefore, in aggregate with the irrevocable undertakings received from the Independent Green REIT Directors, Bidco has received irrevocable undertakings that represent approximately 6.16% of the issued share capital of Green REIT on 13 August 2019 (being the latest practicable date prior to the release of this Announcement). 

The irrevocable undertakings received from each of the Independent Green REIT Directors, Mr Vernon and Mr Gunne and entities related to them and the Investment Manager will cease to have effect on the earlier to occur of the following: (i) the date on which the Scheme becomes Effective; (ii) if this Announcement has not been released by 7am on 22 August 2019; (iii) if the Scheme Document is not posted to shareholders within 28 days of the date of release of this Announcement, or such later date as Henderson Park and Green REIT may, with the consent of the Irish Takeover Panel (if required), agree; (iv) if the Acquisition is not completed by 5pm on the End Date or such later date as Henderson Park and Green REIT may, with the consent of the Panel (if required), agree and (if required) the High Court may allow; or (v) the Acquisition lapses or is withdrawn.

7.         Information on Henderson Park and Bidco

The Henderson Park Group is a European real estate asset and investment management platform.  Henderson Park is recognised as a reliable, solution-driven counterparty for sellers through its ability to underwrite, structure, access funding and successfully complete complex real estate investments in Europe across various asset classes and situations.

 

Discretionary funds advised by Henderson Park are currently capitalised in excess of $3.2 billion of equity, of which approximately $1.5 billion is immediately available to be invested.

Bidco is a newly incorporated Irish company established for the purposes of undertaking the Acquisition. Bidco is a wholly owned indirect subsidiary of the Henderson Park Funds.

8.         Information on Green REIT plc

Green REIT plc is an Irish REIT and is listed on the Irish and London Stock Exchanges. The Company was the first REIT established in Ireland following the introduction of REIT legislation by the Irish Government. The Company's stated strategy is to create a property portfolio consisting primarily of commercial property in Ireland to deliver income and capital growth through opportunistic investments, active property management and prudent use of debt finance.

9.         Structure of the Acquisition

Scheme

It is intended that the Acquisition will be effected by a High Court sanctioned scheme of arrangement in accordance with Chapter 1 of Part 9 of the Act.  Under the Scheme, all Green REIT Shares held by Green REIT Shareholders and which are not already directly or indirectly owned by Henderson Park or Bidco will be cancelled pursuant to Article 53 of Green REIT's Articles of Association and Sections 84 to 86 of the Act in accordance with the terms of the Scheme.  Green REIT will then issue new Green REIT Shares to Bidco in place of the Green REIT Shares that were cancelled pursuant to the Scheme and the Reduction of Capital and Bidco will pay the Consideration for the Acquisition to the Green REIT Shareholders.

As a result of these arrangements, Green REIT will become a wholly-owned subsidiary of Bidco.

To become effective, the Scheme requires, amongst other things, the approval of the Scheme Meeting Resolution by a majority in number of Green REIT Shareholders, present and voting either in person or by proxy at the Scheme Meeting, representing three‑fourths (75%) or more in value of the Green REIT Shares held by such Shareholders, as well as the approval by Green REIT Shareholders of resolutions relating to implementation of the Scheme at the Extraordinary General Meeting to be held directly after the Scheme Meeting.

Application to the High Court to sanction the Scheme

Once the approvals of the Green REIT Shareholders have been obtained at the Scheme Meeting and the Extraordinary General Meeting, and the other Conditions have been satisfied or (where applicable) waived, an application will be made to the High Court to sanction the Scheme under the Act.

Subject to the sanction of the High Court, the Scheme will become Effective in accordance with its terms on delivery to the Registrar of Companies of the Court Order together with the minute required by Section 86 of the Act confirming the Reduction of Capital to take place in connection with the Acquisition, and the Reduction of Capital will become effective upon registration of the Court Order and minute by the Registrar of Companies.  Upon the Scheme becoming Effective, it will be binding on all Green REIT Shareholders, irrespective of whether or not they attended or voted at the Scheme Meeting or Extraordinary General Meeting, or whether they voted in favour of or against the Scheme.

Full details of the Scheme to be set out in the Scheme Document

The Scheme will be governed by the laws of Ireland.  The Scheme will be subject to the applicable requirements of the Irish Takeover Rules and, where relevant, the applicable rules and regulations of the Act.

The Scheme is subject to the satisfaction (or, where applicable, waiver) of the Conditions and the full terms and conditions to be set out in the Scheme Document.  Further details of the Scheme, including the notices of the Scheme Meeting and separate Extraordinary General Meeting required to approve the Resolutions, expected timetable and the action to be taken by Green REIT Shareholders, will be set out in the Scheme Document.

Conditions to the Acquisition

The Acquisition shall be subject to the Conditions and further terms set out in full in Appendix I to this Announcement and to be set out in the Scheme Document.

Scheme timetable and further information

The Scheme Document, which will contain the expected timetable for completion of the Acquisition and action to be taken by Green REIT Shareholders, will be published as soon as practicable and, in any event (save with the consent of the Irish Takeover Panel), within 28 days of this Announcement.

At this stage, subject to the approval and availability of the High Court (which is subject to change) and obtaining the necessary regulatory approvals, Green REIT and Henderson Park expect the implementation of the Acquisition to occur in November 2019. 

10.       Effect of the Scheme on Green REIT Share Plans

There are no outstanding securities convertible into, or rights or options to subscribe for, Green REIT Shares and Green REIT has agreed in the Transaction Agreement not to issue or grant any such securities, rights or options prior to the earlier of the completion of the Acquisition and the date, if any, on which the Transaction Agreement is terminated in accordance with its terms. Accordingly Henderson Park and Green REIT do not expect to have to make a proposal in accordance with Rule 15 of the Irish Takeover Rules.  However, Henderson Park and Green REIT have agreed in the Transaction Agreement that, to the extent a proposal under Rule 15 of the Irish Takeover Rules is required or is so directed by the Irish Takeover Panel, an appropriate proposal will be made to any applicable person no later than five Business Days after the issuance of the Scheme Document.

11.       Financing of the Acquisition

The Consideration payable under the terms of the Acquisition will be funded through a combination of equity financing drawn from the Henderson Park Funds as well as an acquisition facility provided to Bidco by the Blackstone Entities, further details of which will be set out in the Scheme Document.

Wells Fargo Securities International Limited, as financial adviser to Henderson Park, is satisfied that sufficient cash resources are available to Bidco to satisfy in full the Consideration payable to Green REIT Shareholders under the terms of the Scheme.

12.       Board of Green REIT Following the Acquisition

The Green REIT Directors will resign from Green REIT on or immediately after the Effective Date. Green REIT does not have any employees.  It is externally managed by the Investment Manager.

13.       Investment Manager and Investment Manager Agreement

Subject to completion of the Acquisition, the Investment Manager Agreement currently in place between Green REIT and the Investment Manager will be terminated on the Effective Date.  Under the terms of the Investment Manager Agreement, on termination of the Investment Manager Agreement the Investment Manager will be entitled to receive its Base Fee up to the date of termination and, subject to the satisfaction of the performance criteria set out in the Investment Manager Agreement based on an external valuation of Green REIT's portfolio of properties as at the Effective Date, a Performance Fee up to the date of termination of the Investment Manager Agreement. The external valuation of Green REIT's portfolio of properties to be undertaken for the purpose of determining the Performance Fee will be carried out in accordance with the current edition of the Royal Institution of Chartered Surveyors ("RICS") Valuation - Global Standards and the RICS Valuation - Professional Standards as adopted by the Society of Chartered Surveyors in Ireland (the "Red Book") and, it is anticipated, will have regard to the aggregate Consideration payable under the Acquisition. As a result, if the Acquisition completes in November 2019 as expected, it is anticipated that a Performance Fee in a range of approximately €11 million to €12 million will be payable by the Company to the Investment Manager following termination of the Investment Manager Agreement.

At the request of Henderson Park, Green REIT has agreed to enter into a new property management agreement with the Investment Manager, subject to and with effect from termination of the existing Investment Manager Agreement on completion of the Acquisition. The new property management agreement will provide for the continued provision of certain of the property management services currently provided by the Investment Manager to the Company for a six month period following completion of the Acquisition. In consideration for the provision of the property management services under the new property management agreement, Green REIT will pay a fee to the Investment Manager throughout the term of the agreement which will be calculated on an "at-cost" basis. Both Stephen Vernon and Pat Gunne, the current Chair and Chief Executive Officer of the Investment Manager, will cease their employment with the Investment Manager on completion of the Acquisition and neither will be involved in the provision of property management services to Green REIT under the new property management agreement following completion. The new property management agreement will be capable of being terminated by Green REIT on one months' notice at any time. If the new property management agreement runs for the entirety of its scheduled six month term, it is anticipated that the aggregate amounts payable to the Investment Manager, following completion of the Acquisition and the commencement of the new property management agreement, will be approximately €2.13 million (excluding VAT).

For the avoidance of doubt, if the Acquisition is withdrawn, lapses or otherwise does not complete for any reason, the Investment Management Agreement will not be terminated at this time and the new property management agreement will not become effective.

14.       Transaction Agreement

Henderson Park, Bidco and Green REIT have entered into a Transaction Agreement dated 13 August 2019 which contains certain assurances in relation to the implementation of the Scheme and other matters related to the Acquisition.  A summary of the principal terms of the Transaction Agreement will be set out in the Scheme Document. 

The Transaction Agreement provides that where the Independent Green REIT Board determines that a Green REIT Superior Proposal has been received, Green REIT will provide Bidco with an opportunity, for a period of five Business Days from the time of the receipt by Bidco of notice in writing from Green REIT confirming that the Independent Green REIT Board has determined that a Green REIT Superior Proposal has been received together with details of the material terms of such Green REIT Superior Proposal, to increase or modify the Consideration such that the Green REIT Superior Proposal would not constitute a Green REIT Superior Proposal.

15.       Expenses Reimbursement Agreement

Green REIT has entered into an Expenses Reimbursement Agreement dated 13 August 2019 with Henderson Park and Bidco, the terms of which have been approved by the Irish Takeover Panel.  Under the Expenses Reimbursement Agreement, Green REIT has agreed to pay to Bidco in certain circumstances set out below an amount equal to all documented, specific and quantifiable third party costs and expenses incurred by Bidco, or any member of the Henderson Park Group, or on its or their behalf, for the purposes of, in preparation for, or in connection with the Acquisition, including legal, accounting, property, financial and commercial due diligence, arranging financing and engaging advisers to assist in the process, provided that the gross account payable by Green REIT to Bidco shall not, in any event, exceed €13,384,351.52 (being 1% of the total value of the issued and to be issued share capital of Green REIT that is the subject of the Acquisition). 

The amount payable by Green REIT to Bidco under such provisions of the Expenses Reimbursement Agreement will exclude any amounts in respect of VAT incurred by Bidco or any member of the Henderson Park Group attributable to such third party costs other than Irrecoverable VAT incurred by Bidco and/or such member of the Henderson Park Group on such costs. 

The circumstances in which such payment will be made are if:

(a)        the Transaction Agreement is terminated:

(i)            by Henderson Park for the reason that the Independent Green REIT Board:

(A)       withdraws (or modifies in any manner adverse to Bidco) or proposes publicly to withdraw (or modify in any manner adverse to Bidco), the Scheme Recommendation or, if applicable, the recommendation to the holders of Green REIT Shares from the Independent Green REIT Board to accept the Takeover Offer; or

(B)       approves, recommends or declares advisable or proposes publicly to approve, recommend or declare advisable, any Green REIT Alternative Proposal, and

in either case, the Acquisition subsequently lapses or is withdrawn (it being understood, for the avoidance of doubt, that the provision by Green REIT to Henderson Park of notice or information in connection with an Green REIT Alternative Proposal or Green REIT Superior Proposal as required or expressly permitted by the Transaction Agreement shall not, in each case, in and of itself, constitute a circumstance referred to in paragraphs (A) or (B) above); or

(ii)           by Green REIT, upon written notice at any time following delivery of a Final Recommendation Change Notice under and in accordance with the Transaction Agreement and the Acquisition subsequently lapses or is withdrawn; or

(b)        all of the following occur:

(i)            prior to the Scheme Meeting (or, in the case of a Takeover Offer prior to the Final Closing Date), a Green REIT Alternative Proposal is formally publicly disclosed by Green REIT or any person shall have formally publicly announced an intention (whether or not conditional) to make a Green REIT Alternative Proposal and, in each case, such disclosure or announcement is not publicly withdrawn without qualification at least three Business Days before the date of the Scheme Meeting or Final Closing Date; and

(ii)           the Transaction Agreement is terminated by Henderson Park for the reason that Green REIT shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the Transaction Agreement, which material breach or failure to perform:

(A)       would result in a failure of any of the Conditions; and

(B)       is not reasonably capable of being cured by the End Date or, if curable, Henderson Park shall have given Green REIT written notice, delivered at least 30 days prior to such termination, stating Henderson Park's intention to terminate the Transaction Agreement pursuant to clause 9.1(a)(vi) of the Transaction Agreement and the basis for such termination and such breach, failure to perform or inaccuracy shall not have been cured within 30 days following the delivery of such written notice or, if earlier, by the End Date; and

(iii)          the Green REIT Alternative Proposal referred to in paragraph (b)(i) above is consummated, or a definitive agreement providing for a Green REIT Alternative Proposal is entered into (provided such Green REIT Alternative Proposal is subsequently consummated pursuant to that definitive agreement), in each case, with the person referred to in paragraph (b)(i) within 12 months after the date of this Announcement, or a Green REIT Alternative Proposal is consummated with a person who is not connected in any way to the person referred to in paragraph (b)(i) above within 12 months after the date of this Announcement and the value of the consideration offered under such Green REIT Alternative Proposal is at least equal to the consideration offered under the Acquisition; or

(c)        all of the following occur:

(i)            prior to the Scheme Meeting (or, in the case of a Takeover Offer prior to the Final Closing Date), a Green REIT Alternative Proposal is formally publicly disclosed by Green REIT or any person shall have formally publicly announced an intention (whether or not conditional) to make a Green REIT Alternative Proposal and, in each case, such disclosure or announcement is not publicly withdrawn without qualification at least three Business Days before the date of the Scheme Meeting or Final Closing Date; and

(ii)           the Transaction Agreement is terminated by either Green REIT or Henderson Park for the reason that the Scheme Meeting or the EGM shall have been completed and the Scheme Meeting Resolution or the EGM Resolutions, as applicable, shall not have been approved by the requisite majority of votes (or, in the case of a Takeover Offer, the Final Closing Date having passed without the Takeover Offer becoming unconditional as to acceptances); and

(iii)          the Green REIT Alternative Proposal referred to in paragraph (c)(i) above is consummated, or a definitive agreement providing for a Green REIT Alternative Proposal is entered into (provided such Green REIT Alternative Proposal is subsequently consummated pursuant to that definitive agreement), in each case with the person referred to in paragraph (c)(i) within 12 months after the date of this Announcement, or a Green REIT Alternative Proposal is consummated with a person who is not connected in any way to the person referred to in paragraph (c)(i) above within 12 months after the date of this Announcement and the value of the consideration offered under such Green REIT Alternative Proposal is at least equal to the consideration offered under the Acquisition.

In paragraphs (b) and (c) above, references to 10% in limb (d) of the definition of "Green REIT Alternative Proposal" shall be deemed to refer to 25%.

Each of the Independent Green REIT Board, J.P. Morgan Cazenove as lead financial adviser to Green REIT and Davy as joint financial adviser and Rule 3 adviser to Green REIT, has confirmed in writing to the Irish Takeover Panel that for the purposes of the Note to Rule 21.2 of the Irish Takeover Rules, they consider the terms of the Expenses Reimbursement Agreement to be in the best interests of Green REIT Shareholders.

16.       Valuations

As at 30 June 2019, Green REIT's property portfolio was independently valued (within the meaning of Rule 29.1(a) of the Irish Takeover Rules) at €1.557 billion. The valuation reports of the Valuers required in accordance with Rule 29 of the Irish Takeover Rules in connection with this valuation are included in Appendix IV.  Each Valuer has:

·          given and not withdrawn its written consent to the inclusion of its name and of its property valuation report in this announcement in the form and context in which they appear; and

·          confirmed that an updated valuation as at the date of this Announcement would not be materially different to the valuation as at 30 June 2019 contained within its property valuation report.

In accordance with Rule 29.3 of the Irish Takeover Rules, if the Properties were to be sold at the values stated, the Green REIT Directors estimate that the potential tax liability that would arise would be approximately €16.2 million. If the Properties were sold by Green REIT at the date of this Announcement, the Green REIT Directors consider it likely that this liability would arise, however the Green REIT Directors have no current intention to sell the Properties. For the avoidance of doubt, the proposed Acquisition of Green REIT by way of the Scheme will not constitute a sale of the individual Properties but rather will constitute the acquisition of the entire issued and to be issued share capital of Green REIT by Bidco.

17.       Delisting and Cancellation of Trading of Green REIT Shares

An application will be made to Euronext Dublin and the London Stock Exchange prior to the Effective Date to cancel the admission of the Green REIT Shares to trading on the Main Market of Euronext Dublin and the London Stock Exchange, respectively, and to the FCA to cancel the listing of the Green REIT Shares on the FCA's Official List with effect from shortly after the Effective Date, subject to and following the Scheme becoming Effective. 

Dealing in Green REIT Shares on the Main Market of Euronext Dublin and the London Stock Exchange may be suspended prior to the Effective Time. An appropriate announcement in this regard will be made in due course.

As soon as reasonably practicable after the Effective Date, it is intended that Green REIT will be re-registered as a private company limited by shares.

18.       Interests and Short Positions in Green REIT

As at the close of business on 13 August 2019 (being the last practicable date prior to the release of this Announcement), neither Henderson Park nor Bidco nor, so far as Henderson Park and Bidco are aware, any person Acting in Concert with Henderson Park or Bidco:

(a)        had an interest in relevant securities of Green REIT;

(b)        had any short position in relevant securities of Green REIT;

(c)        had received an irrevocable commitment or letter of intent to accept the terms of the Acquisition in respect of relevant securities of Green REIT other than as described in this Announcement; or

(d)        had borrowed or lent any Green REIT Shares.

Furthermore, no arrangement to which Rule 8.7 of the Irish Takeover Rules applies exists between Henderson Park, Bidco or Green REIT or a person Acting in Concert with Henderson Park, Bidco or Green REIT in relation to Green REIT Shares.  For these purposes, an "arrangement to which Rule 8.7 of the Irish Takeover Rules applies" includes any indemnity or option arrangement, and any agreement or understanding, formal or informal, of whatever nature, between two or more persons relating to relevant securities which is or may be an inducement to one or more of such persons to deal or refrain from dealing in such securities.

In the interests of confidentiality, Henderson Park and Bidco have made only limited enquiries in respect of certain parties who may be deemed by the Irish Takeover Panel to be Acting in Concert with it for the purposes of the Acquisition.  Further enquiries will be made to the extent necessary as soon as practicable following the date of this Announcement and any disclosure in respect of such parties will be included in the Scheme Document.

19.       General

The Acquisition and the Scheme will be made subject to the Conditions and the further terms to be set out in the Scheme Document.  The Scheme Document will include full details of the Acquisition and will be accompanied by the appropriate notices of the Scheme Meeting and separate Extraordinary General Meeting required to approve the Resolutions and forms of proxy. 

J.P. Morgan Cazenove, Davy, Wells Fargo Securities and Eastdil Secured have each given and not withdrawn their consent to the publication of this Announcement with the inclusion herein of the references to their names in the form and context in which they appear.

The Scheme Document, notices and forms of proxy will be despatched to Green REIT Shareholders as soon as practicable and, in any event, (save with the consent of the Irish Takeover Panel) within 28 days of this Announcement.  The Scheme Document will include full details of the Acquisition, together with the expected timetable, and will specify the necessary action to be taken by Green REIT Shareholders in order to vote in favour of the Scheme (at the Scheme Meeting) and the EGM Resolutions (at the Extraordinary General Meeting).

The Acquisition will be governed by the laws of Ireland and will be subject to the requirements of the Irish Takeover Rules and applicable Law.  This Announcement is being made pursuant to Rule 2.5 of the Irish Takeover Rules.

Appendix I to this Announcement contains the Conditions and certain further terms of the Acquisition and the Scheme.  Appendix II to this Announcement contains definitions of certain expressions used in this Announcement.  Appendix III to this Announcement contains further details of the sources of information and bases of calculations set out in this Announcement.  Appendix IV to this Announcement contains the opinions of Green REIT's independent valuers in respect of certain asset valuations included in this announcement.

Enquiries:

 

 

J.P. Morgan Cazenove (Lead Financial Adviser and Corporate Broker to Green REIT)

 

 

Bronson Albery / Paul Hewlett / David Connern

Tel: +44 207 742 4000

 

Davy (Joint Financial Adviser and Corporate Broker to Green REIT)

 

 

Ronan Godfrey / Brian Garrahy

Tel: +353 1 679 7788

 

CBRE Indirect Investment Services Limited (Property Adviser to Green REIT)

 

 

Stephen Hubbard / Chris Brett / Mark Evans

Tel: +44 207 182 2000

 

Press enquiries

 

 

Drury | Porter Novelli

 

 

Billy Murphy

Tel: +353 1 260 5000 /
+353 87 231 3085

 

 

Eastdil Secured (Financial Adviser to Henderson Park)

James McCaffrey / Max von Hurter

 

Wells Fargo Securities (Financial Adviser to Henderson Park)

Sam Small / Chris Tucker

 

 

Tel: +44 (0)20 7074 4950

 

 

Tel: +44 (0)20 3942 8000

Henderson Park Press enquiries

FTI Consulting (International)

 

Richard Sunderland

Tel: +44 (0)20 3727 1000

 

Statements required by the Irish Takeover Rules

The Henderson Park Directors and the Bidco Directors accept responsibility for the information contained in this Announcement other than that relating to Green REIT, the Green REIT Group, the Investment Manager and the Green REIT Directors and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the Henderson Park Directors and the Bidco Directors (who, in each case, have taken all reasonable care to ensure that this is the case) the information contained in this Announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

The Green REIT Directors accept responsibility for the information contained in this Announcement relating to Green REIT, the Green REIT Group and the Green REIT Directors and members of their immediate families, related trusts and persons connected with them, except for the recommendation and related opinions of the Independent Green REIT Board.  The Independent Green REIT Board accept responsibility for the recommendation and related opinions of the Independent Green REIT Board contained in this Announcement.  To the best of the knowledge and belief of the Green REIT Directors and the Independent Green REIT Directors (who, in each case, have taken all reasonable care to ensure such is the case), the information contained in this Announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

J.P. Morgan Securities plc, which conducts its UK and Ireland investment banking business as J.P. Morgan Cazenove, is authorised by the PRA and regulated by the PRA and the FCA. J.P Morgan Cazenove is acting as financial adviser exclusively for Green REIT and no one else in connection with the Acquisition and the matters set out in this Announcement. In connection with such matters, J.P. Morgan Cazenove, its affiliates and their respective partners, directors, officers, employees and agents will not regard any person other than Green REIT as their client, nor will they be responsible to anyone other than Green REIT for providing the protections afforded to their clients or for providing advice in relation to the Acquisition, the contents of this Announcement or any other matter referred to in this Announcement.

Davy, which is authorised and regulated by the Central Bank of Ireland, is acting exclusively for Green REIT and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than Green REIT for providing the protections afforded to clients of Davy, or for providing advice in connection with the matters referred to in this Announcement.

"Wells Fargo Securities" and "Eastdil Secured" are both trading names of Wells Fargo Securities International Limited. Wells Fargo Securities International Limited is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom. Wells Fargo Securities International Limited (trading as "Wells Fargo Securities" and "Eastdil Secured") is acting exclusively as financial adviser to Henderson Park and Bidco and will not be responsible to anyone other than Henderson Park and Bidco for providing the protections afforded to its clients, or for providing advice in relation to the matters set out in this Announcement.

Arthur Cox is acting as legal adviser to Green REIT and A&L Goodbody is acting as legal adviser to Henderson Park and Bidco.

This Announcement is for information purposes only and is not intended to, and does not, constitute or form any part of any offer or invitation, or the solicitation of an offer, to purchase or otherwise acquire, subscribe for, sell or otherwise dispose of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.  The Acquisition will be made solely by means of the Scheme Document (or, if applicable, the Takeover Offer Document), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition.  Any decision in respect of, or other response to, the Acquisition, should be made only on the basis of the information contained in the Scheme Document (or, if applicable, the Takeover Offer Document).

This Announcement does not constitute a prospectus or a prospectus equivalent document.

This Announcement has been prepared for the purpose of complying with the laws of Ireland and the Irish Takeover Rules and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of Ireland.

Cautionary Statement Regarding Forward-Looking Statements

This Announcement contains certain forward-looking statements with respect to Henderson Park, Bidco and Green REIT.  These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts.  Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "believe", "will", "may", "would", "could" or "should" or other words of similar meaning or the negative thereof.  Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, economic performance, financial conditions, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of the operations of the Henderson Park Group or the Green REIT Group; and (iii) the effects of government regulation on the business of the Henderson Park Group or the Green REIT Group.

These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements.  These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future.  You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  All subsequent oral or written forward-looking statements attributable to Henderson Park, Bidco or Green REIT or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above.  Neither Henderson Park, Bidco nor Green REIT undertake any obligation to update publicly or revise forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

Disclosure requirements of the Irish Takeover Rules

Under the provisions of Rule 8.3 of the Irish Takeover Rules, if any person is, or becomes, 'interested' (directly or indirectly) in, 1% or more of any class of 'relevant securities' of , all 'dealings' in any 'relevant securities' of Green REIT (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by not later than 3:30 pm (Irish time) on the 'business' day following the date of the relevant transaction.  This requirement will continue until the date on which the 'offer period' ends.  If two or more persons co-operate on the basis of any agreement, either express or tacit, either oral or written, to acquire an 'interest' in 'relevant securities' of Green REIT, they will be deemed to be a single person for the purpose of Rule 8.3 of the Irish Takeover Rules.

Under the provisions of Rule 8.1 of the Irish Takeover Rules, all 'dealings' in 'relevant securities' of Green REIT by Henderson Park, or by any party Acting in Concert with Henderson Park, must also be disclosed by no later than 12 noon (Irish time) on the business day following the date of the relevant transaction. 

A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, can be found on the Irish Takeover Panel's website at www.irishtakeoverpanel.ie. 

'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities.  In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Irish Takeover Rules, which can also be found on the Irish Takeover Panel's website.  If you are in any doubt as to whether or not you are required to disclose a dealing under Rule 8, please consult the Irish Takeover Panel's website at www.irishtakeoverpanel.ie or contact the Irish Takeover Panel on telephone number +353 1 678 9020.

No profit forecasts or merger benefit statement

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share, for Henderson Park, Bidco or Green REIT, respectively for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Henderson Park, Bidco or Green REIT, respectively.  No statement in this Announcement constitutes an estimate of the anticipated financial effects of the Acquisition.

Right to switch to a Takeover Offer

Henderson Park reserves the right to elect, subject to the terms of the Transaction Agreement, compliance with the Irish Takeover Rules and with the consent of the Irish Takeover Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued share capital of Green REIT as an alternative to the Scheme.  In such an event, the Takeover Offer will be implemented on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Scheme and subject to the amendments referred to in Appendix I to this Announcement and in the Transaction Agreement.

Publication on website

Pursuant to Rules 2.6(c) and 19.9 of the Irish Takeover Rules, this Announcement will be made available (including to Henderson Park's employees) on Henderson Park's website (www.greenreitbidcoinfo.com) and on Green REIT's website (www.greenreitplc.com) by no later than 12:00 noon on the Business Day following this Announcement.

Neither the content of any such website nor the content of any other website accessible from hyperlinks on such website is incorporated into, or forms part of, this Announcement.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments.  Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Restricted Jurisdictions

The laws of certain jurisdictions may affect the availability of the Acquisition to persons who are not resident in Ireland or the United Kingdom.  Persons who are not resident in Ireland or the United Kingdom, or who are subject to laws of any jurisdiction other than Ireland or the United Kingdom, should inform themselves about, and observe, any applicable legal or regulatory requirements.  Any failure to comply with applicable legal or regulatory requirements may constitute a violation of the laws and/or regulations of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility and liability for the violation of such restrictions by any person.

The Acquisition will not be made available, directly or indirectly, in any Restricted Jurisdiction, and the Acquisition will not be capable of acceptance from within a Restricted Jurisdiction. 

The release, publication or distribution of this Announcement in or into certain jurisdictions may be restricted by the laws of those jurisdictions.  Accordingly, copies of this Announcement and all other documents relating to the Acquisition are not being, and must not be, released, published, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction.  Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions.  Failure to do so may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, Henderson Park and Green REIT disclaim any responsibility or liability for the violations of any such restrictions by any person.

 

APPENDIX I

CONDITIONS AND CERTAIN FURTHER TERMS OF THE ACQUISITION AND THE SCHEME

The Acquisition and the Scheme will comply with the Irish Takeover Rules, the Act and, where relevant, the Euronext Dublin Listing Rules and the UK Listing Rules and will be subject to the terms and conditions set out in this Announcement and to be set out in the Scheme Document. The Acquisition and the Scheme are governed by the laws of Ireland.

Terms defined in Appendix II shall have the same meaning where used in this Appendix I.

Conditions to the Acquisition and the Scheme

The Acquisition and the Scheme will be subject to the following conditions:

1.         The Acquisition will be conditional upon the Scheme becoming Effective and unconditional by not later than the End Date (or such earlier date as may be specified by the Irish Takeover Panel, or such later date as Green REIT and Henderson Park may, with the consent of the Irish Takeover Panel (if required), agree and (if required) the High Court may allow).

2.         The Scheme will be conditional upon:

2.1          the approval of the Scheme by a majority in number of the Green REIT Shareholders representing at least three-fourths (75%) in value of the Green REIT Shares, at the Voting Record Time, held by such holders, present and voting either in person or by proxy, at the Scheme Meeting;

2.2          the EGM Resolutions being duly passed by the requisite majority of Green REIT Shareholders at the EGM;

2.3          the sanction by the High Court (with or without material modification), but subject to any such modification being acceptable to each of Henderson Park and Green REIT, of the Scheme pursuant to Chapter 1 of Part 9 of the Act and the confirmation of the Reduction of Capital by the High Court (the date on which the condition in this paragraph 2.3 is satisfied, the "Sanction Date"); and

2.4          office copies of the Court Order and the minute required by Section 86 of the Act in respect of the Reduction of Capital being delivered for registration to the Registrar of Companies and registration of the Court Order and minute confirming the Reduction of Capital by the Registrar of Companies.

3.         Henderson Park and Green REIT have agreed that, subject to paragraph 4 of this Appendix I, the Acquisition will also be conditional upon the following matters having been satisfied or waived on or before the Sanction Date:

General Regulatory and Anti-Trust / Competition

3.1          to the extent that the Acquisition or its implementation constitutes a merger or acquisition within the scope of Part 3 of the Competition Act, one of the following events having occurred:

(a)           the CCPC having informed the notifying parties pursuant to Section 21(2)(a) of the Competition Act that it has made a determination that the Acquisition may be put into effect or put into effect subject to commitments; or

(b)           the period specified in Section 21(2) of the Competition Act (as may be extended under Section 21(4) of the Competition Act) having elapsed without the CCPC having informed the notifying parties of the determination (if any) which has been made under Section 21(2) of the Competition Act; or

(c)           the CCPC having informed the notifying parties that it has determined under Section 22(3) of the Competition Act that the Acquisition may be put into effect or put into effect subject to conditions specified by the CCPC being complied with; or

(d)           the period specified in Section 19(1)(d) of the Competition Act having elapsed, without the CCPC having made a determination under Section 22 of the Competition Act;

3.2          no (i) Law, (ii) injunction, restraint or prohibition by any court of competent jurisdiction or (iii) injunction, order, prohibition under any Antitrust Law or Antitrust Order by any Relevant Authority shall have been enacted or entered and shall continue to be in effect which would or would reasonably be expected to prohibit or prevent consummation of the Acquisition;

Termination of the Transaction Agreement

3.3          the Transaction Agreement not having been terminated as a consequence of any of the following events having occurred (such events (including that set out in the Condition in paragraph 3.4 below) being the events set out in the Transaction Agreement following the occurrence of which the Transaction Agreement may be terminated in accordance with its terms):

(a)           if the Acquisition is implemented by way of a Scheme, by either Green REIT or Bidco if the Scheme Meeting or the EGM have been completed and either the Scheme or the EGM Resolutions, as applicable, have not been approved by the requisite majorities of Green REIT Shareholders;

(b)           by either Green REIT or Bidco if the Effective Time has not occurred by 5.00 pm on the End Date, provided that the right to terminate the Transaction Agreement shall not be available to a Party whose breach of any provision of the Transaction Agreement has been the primary cause of the failure of the Effective Time to have occurred by such time;

(c)           if the Acquisition is implemented by way of a Scheme, by either Green REIT or Bidco if the High Court declines or refuses to sanction the Scheme, unless Green REIT and Henderson Park agree within 30 days of such decision that the decision of the High Court will be appealed;

(d)           by either Green REIT or Bidco if an injunction has been entered permanently restraining, enjoining or otherwise prohibiting the consummation of the Acquisition and such injunction has become final and non-appealable (provided that the right to terminate the Transaction Agreement will not be available to a Party whose breach of any provision of the Transaction Agreement has been the primary cause of such injunction);

(e)           by Green REIT, if Henderson Park or Bidco has breached or failed to perform in any material respect any of their covenants or other agreements contained in the Transaction Agreement or any of their representations or warranties set forth in the Transaction Agreement having been inaccurate, which material breach, failure to perform or inaccuracy would result in a failure of any Conditions which is not reasonably capable of being cured by the End Date or, if curable, Green REIT has given Henderson Park or Bidco written notice, delivered at least 30 days prior to such termination, stating Green REIT's intention to terminate the Transaction Agreement and the basis for such termination and such breach, failure to perform or inaccuracy has not been cured within 30 days following the delivery of such written notice or, if earlier, by the End Date;

(f)            by Bidco, if Green REIT has breached or failed to perform in any material respect any of its covenants or other agreements contained in the Transaction Agreement or any of its representations or warranties set forth in the Transaction Agreement having been inaccurate, which material breach, failure to perform or inaccuracy would result in a failure of any Conditions which is not reasonably capable of being cured by the End Date or, if curable, Bidco has given Green REIT written notice, delivered at least 30 days prior to such termination, stating Bidco's intention to terminate the Transaction Agreement and the basis for such termination and such breach, failure to perform or inaccuracy has not been cured within 30 days following the delivery of such written notice or, if earlier, by the End Date;

(g)           by Bidco, in the event that an Green REIT Change of Recommendation has occurred or the Independent Green REIT Board having withdrawn (or modifying in any manner adverse to Bidco) or proposing publicly to withdraw (or modifying in any manner adverse to Bidco) the Scheme Recommendation; or

(h)           by Green REIT upon written notice at any time following delivery of a Final Recommendation Change Notice in accordance with the terms of the Transaction Agreement;

3.4          the Transaction Agreement not having been terminated by the mutual written consent of Green REIT and Bidco, subject to the consent of the Irish Takeover Panel (if required);

Certain matters arising as a result of any arrangement, agreement, etc.

3.5          except as Disclosed, there being no provision of any arrangement, agreement, licence, permit, authorisation, franchise, facility, lease or other instrument to which any member of the Green REIT Group is a party or by or to which any such member or any of its respective assets may be bound, entitled or subject and which, in consequence of the Acquisition or the proposed acquisition by any member of the Henderson Park Group of any Green REIT Shares or other securities (or the equivalent) in or control of Green REIT or any member of the Green REIT Group or because of a change in the control or management of any member of the Green REIT Group or otherwise, would or would be reasonably expected to result in any of the following (in any such case to an extent which is material in value terms in the context of the Green REIT Group taken as a whole):

(a)           any monies borrowed by, or any other indebtedness or liability (actual or contingent) of, or any grant available to any member of the Green REIT Group becoming payable, or becoming capable of being declared repayable, immediately or prior to their or its stated maturity, or the ability of any such member to borrow monies or incur any indebtedness being or becoming capable of being withdrawn or inhibited;

(b)           the creation, save in the ordinary course of business, or enforcement of any mortgage, charge or other security interest wherever existing or having arisen over the whole or any material part of the business, property or assets of any member of the Green REIT Group or any such mortgage, charge or other security interest becoming enforceable;

(c)           the rights, liabilities, obligations, interests or business of any member of the Green REIT Group under any such arrangement, agreement, licence, permit, authorisation, franchise, facility, lease or other instrument or the rights, liabilities, obligations or interests or business of any member of the Green REIT Group in or with any other firm or company or body or person (or any agreement/arrangement or arrangements relating to any such business or interests) being terminated or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder;

(d)           any material assets or interests of, or any asset the use of which is enjoyed by, any member of the Green REIT Group being or falling to be disposed of or charged or ceasing to be available to any member of the Green REIT Group or any right arising under which any such asset or interest would be required to be disposed of or charged or would cease to be available to any member of the Green REIT Group otherwise than in the ordinary course of business;

(e)           any material member of the Green REIT Group ceasing to be able to carry on business in any jurisdiction in which it currently operates;

(f)            the value of, or the financial or trading position of any member of the Green REIT Group being prejudiced or adversely affected;

(g)           the creation or acceleration of any liability or liabilities (actual or contingent) by any member of the Green REIT Group, other than the creation of trade creditors or other liabilities incurred in the ordinary course of business; or

(h)           any material liability of any member of the Green REIT Group arising in respect of any severance, termination, bonus or other payment to any of the directors or other officers,

unless, if any such provision exists, such provision shall have been waived, modified or amended on terms reasonably satisfactory to Bidco;

Certain events occurring after the date of this Announcement

3.6          except as Disclosed, and save as permitted in accordance with the terms of the Transaction Agreement, no member of the Green REIT Group having since 30 June 2019:

(a)           save as between Green REIT and wholly-owned Subsidiaries of Green REIT or between such wholly-owned Subsidiaries, issued, granted, conferred, or awarded or agreed to issue, grant, confer or award or authorised or proposed the issue of additional shares of any class, or any rights or securities convertible into or exchangeable for shares, or rights, warrants or options to subscribe for or acquire any such shares, securities or convertible securities;

(b)           recommended, announced, declared, paid or made or proposed to recommend, announce, declare, pay or make any bonus issue, dividend or other distribution (whether in cash or otherwise) any dividend declared prior to the Effective Date by any wholly-owned Subsidiary of Green REIT;

(c)           save for transactions between Green REIT and its wholly-owned Subsidiaries or between such wholly-owned Subsidiaries, merged with or demerged or acquired any body corporate, partnership or business or acquired or disposed of, or transferred, mortgaged or charged or created any security interest over, any material assets or any right, title or interest in any material asset (including shares and trade investments) or authorised, proposed or announced any intention to do so in each case which is material in the context of the Green REIT Group taken as a whole;

(d)           save as between Green REIT and its wholly-owned Subsidiaries or between such wholly-owned Subsidiaries, made, authorised, proposed or announced an intention to propose any change in its loan capital other than in the ordinary and usual course of carrying out its current banking activities;

(e)           issued, authorised or proposed the issue of any loan capital or debentures, or (save as between Green REIT and its wholly owned Subsidiaries or between such wholly-owned Subsidiaries) incurred or increased any indebtedness or contingent liability over and above existing facilities currently available to the Green REIT Group and/or any member of the Green REIT Group, in any such case otherwise than in a manner which is materially consistent with the business of the Green REIT Group being conducted in the ordinary and usual course;

(f)            entered into or varied or announced its intention to enter into or vary any contract, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) (otherwise than in the ordinary and usual course of business) which is of a long term, unusual or onerous nature, or magnitude which is, in any such case, material in the context of the Green REIT Group taken as a whole or which would be materially restrictive on the business of any material member of the Green REIT Group or the Henderson Park Group;

(g)           except in the ordinary and usual course of business, entered into or materially improved the terms of, or made any offer (which remains open for acceptance) to enter into or materially improve the terms of, any employment contract, commitment or terms of appointment with any Green REIT Director or any person occupying one of the senior executive positions in the Green REIT Group;

(h)           except in the ordinary and usual course of business, proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme, or other benefit relating to the employment or termination of employment of any employee of the Green REIT Group, which in any such case would be material in the context of the incentive schemes operated by the Green REIT Group;

(i)            made, agreed or consented to any significant change to the terms of the trust deeds (including the termination or partial termination of the trusts) constituting the pension schemes established for its directors, employees or their dependants or the benefits which accrue, or to the pensions which are payable, thereunder, or to the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined or to the basis on which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to any change to the trustees involving the appointment of a trust corporation, or causing any employee of the Green REIT Group to cease to be a member of any pension scheme by withdrawing as a participating employer in such pension scheme, or unlawfully terminating the employment of any active member of a pension scheme, or making any employee member of the Green REIT Group redundant, or exercising any discretion under the provisions governing such pension scheme, which in any such case would be material in the context of the pension schemes operated by Green REIT Group;

(j)            save as between Green REIT and wholly-owned Subsidiaries of Green REIT, purchased, redeemed or repaid or proposed the purchase, redemption or repayment of any of its own shares or other securities or reduced or, save in respect of the matters mentioned in sub-paragraph 3.6(a) above, made any other change to any part of its share capital to an extent which (other than in the case of Green REIT) is material in the context of the Green REIT Group taken as a whole;

(k)           waived or compromised any claim otherwise than in the ordinary and usual course of business which is material in the context of the Green REIT Group taken as a whole;

(l)            save for voluntary solvent liquidations, taken or proposed any corporate action or had any legal proceedings instituted or threatened against it in respect of its winding-up, dissolution, examination or reorganisation or for the appointment of a receiver, examiner, administrator, administrative receiver, trustee or similar officer of all or any part of its assets or revenues, or (A) having been the subject of any analogous proceedings in any jurisdiction, or (B) appointed any analogous person in any jurisdiction (except, in each case, where the consequences thereof would not be material (in value terms or otherwise) in the context of the Green REIT Group taken as a whole);

(m)          altered the provisions of the memorandum and articles of association of any member of the Green REIT Group the effect of which is material in the context of the Green REIT Group taken as a whole; or

(n)           been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business which is material in the context of the Green REIT Group taken as a whole;

No Adverse Change, Litigation, Regulatory or Similar Proceedings

3.7          except as Disclosed, since 30 June 2019:

(a)           no adverse change or deterioration having occurred in the business, financial or trading position, or profits of any member of the Green REIT Group which is material to the Green REIT Group taken as a whole and which has not arisen wholly or in all material respects as a result of the proposed Acquisition;

(b)           no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Green REIT Group or to which any member of the Green REIT Group is or may become a party (whether as plaintiff or defendant or otherwise) and no enquiry or investigation by or complaint or reference to any Relevant Authority against or in respect of any member of the Green REIT Group having been threatened, announced or instituted or remaining outstanding which, in any such case, might be reasonably likely to adversely affect any member of the Green REIT Group to an extent which is material to the Green REIT Group taken as a whole;

(c)           no contingent or other liability having arisen or being likely to arise or having become apparent to Henderson Park which is or would be likely to adversely affect the business, assets, financial or trading position of any member of the Green REIT Group to an extent which is material to the Green REIT Group taken as a whole;

(d)           no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence, consent, permit or authorisation held by any member of the Green REIT Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which is material and likely to adversely affect the Green REIT Group taken as a whole;

(e)           Bidco not having discovered that any financial, business or other information concerning the Green REIT Group, that is material in the context of the Green REIT Group as a whole and has been disclosed publicly, is misleading or contains any misrepresentation of fact or omits to state a fact necessary to make that information not misleading and, in each case, such disclosure is likely to materially adversely affect the Green REIT Group taken as a whole; and

(f)            no member of the Green REIT Group having conducted its business in breach of applicable laws or applicable laws and regulations which is material in the context of the Green REIT Group taken as a whole.

No Change in Indebtedness; No Default

3.8          the aggregate outstanding Indebtedness of Green REIT and its wholly-owned Subsidiaries is not greater than the total amount available to the Green REIT Group under its existing available facilities; and

3.9          save as Disclosed, no member of the Green REIT Group being in default under the terms or conditions of any facility or agreement or arrangement for the provision of loans, credit or drawdown facilities, or of any security, surety or guarantee in respect of any facility or agreement or arrangement for the provision of loans, credit or drawdown facilities to any member of the Green REIT Group (save where such default is not or would not be material (in value terms or otherwise) in the context of the Green REIT Group taken as a whole).

Waiver and Invocation of the Conditions

4.         Subject to the requirements of the Irish Takeover Panel, Henderson Park reserves the right (but shall be under no obligation) to waive (to the extent permitted by applicable Law), in whole or in part, all or any of the Conditions in paragraph 3.

Implementation by way of Takeover Offer

5.         Henderson Park reserves the right, subject to the prior written approval of the Irish Takeover Panel, to effect the Acquisition by way of a Takeover Offer in the circumstances described in and subject to the terms of clause 3.6 of the Transaction Agreement. Without limiting clause 3.6 of the Transaction Agreement, in such event, such offer will be implemented on terms and conditions that are at least as favourable to the Green REIT Shareholders (except for an acceptance condition set at 90% of the nominal value of the Green REIT Shares to which such an offer relates and which are not already in the beneficial ownership of Henderson Park so far as applicable which may be waived down to 50% plus 1 Green REIT Share) as those which would apply in relation to the Scheme.

Certain further terms of the Acquisition

6.         If Henderson Park is required to make an offer for Green REIT Shares under the provisions of Rule 9 of the Irish Takeover Rules, Henderson Park may make such alterations to any of the conditions set out in paragraphs 1, 2 and 3 above as are necessary to comply with the provisions of that rule.

7.         As required by Rule 12(b)(i) of the Irish Takeover Rules, to the extent that the Acquisition would give rise to a concentration with a Community dimension within the scope of the EU Merger Regulation, the Scheme shall, except as otherwise approved by the Irish Takeover Panel, lapse if the European Commission initiates proceedings in respect of that concentration under Article 6(1)(c) of the EU Merger Regulation or refers the concentration to a competent authority of an EEA member state under Article 9(1) of the EU Merger Regulation prior to the date of the Scheme Meeting.

8.         Henderson Park and Bidco reserve the right for one or more of their Subsidiaries from time to time to implement the Acquisition with the prior written approval of the Irish Takeover Panel.

9.         This Announcement and any rights or liabilities arising hereunder, the Acquisition and the Scheme will be governed by Irish law and be subject to the jurisdiction of the Irish courts.

 

 

APPENDIX II

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires:

"Acquisition" means the proposed acquisition by Bidco of Green REIT by means of the Scheme or a Takeover Offer (and any such Scheme or Takeover Offer as it may be revised, amended or extended from time to time) including the payment by Bidco of the Consideration under the Scheme or such Takeover Offer, as described in this Announcement and provided for in the Transaction Agreement;

"Act" means the Companies Act 2014;

"Acting in Concert" has the meaning given to the term "persons acting in concert" in Regulation 8(2) of the Takeover Regulations;

"Announcement" means this announcement, made in accordance with Rule 2.5 of the Irish Takeover Rules, dated 14 August 2019, including its summary and appendices;

"Antitrust Law" means any federal, state or foreign Law designed to prohibit, restrict or regulate actions for the purpose or effect of monopolisation or restraint of trade;

"Antitrust Order" means any legislative, administrative or judicial action, decree, judgment, injunction, decision or other order (whether temporary, preliminary or permanent) that restricts, prevents or prohibits the consummation of the Acquisition or any other transactions contemplated by the Transaction Agreement under any Antitrust Law;

"Base Fee" means the base fee payable to the Investment Manager in accordance with the terms of the Investment Manager Agreement;

"Bidco" means HPREF Dublin Office Bidco Limited, a private company limited by shares incorporated in Ireland with registered number 653703, having its registered office at 3rd Floor Fleming Court, Fleming's Place, Dublin 4, Ireland;

"Bidco Directors" means the directors of Bidco from time to time and for the time being;

"Blackstone Entities" means Gloss Finco 1, LLC, Gloss Finco 2, LLC and Gloss Finco 3, LLC, advised by Blackstone affiliates;

"Business Day" means any day, other than a Saturday, Sunday or public holiday in Dublin or London;

"CBREUC" means CBRE Unlimited Company, a private unlimited company incorporated in Ireland with registered number 316570, having its registered office at Connaught House, Number 1, Burlington Road, Dublin 4;

"CCPC" means the Competition and Consumer Protection Commission;

"Competition Act" means the Competition Act 2002;

"Concert Parties" means in relation to any Party, such persons as are deemed to be Acting in Concert with that Party pursuant to Rule 3.3 of Part A of the Irish Takeover Rules and such persons as are Acting in Concert with that Party and "Concert Party" means any one of them;

"Conditions" means the conditions to the Scheme and the Acquisition set out in Appendix I to this Announcement and "Condition" means any one of the Conditions;

"Consideration" means €1.9135 per Green REIT Share;

"Constitution" means the constitution of Green REIT as in effect from time to time;

"Court Hearing" means the hearing by the High Court of the application to sanction the Scheme under Section 453 of the Act;

"Court Order" means the order or orders of the High Court sanctioning the Scheme under Section 453 of the Act and confirming the Reduction of Capital under Sections 84 and 85 of the Act;

"Davy" means J&E Davy;

"DFM Systems" means Digital Facilities Management Limited trading as "DFM Systems";

"Disclosed" means the information disclosed by or on behalf of Green REIT: (i) in the Green REIT Public Reports; (ii) in this Announcement; (iii) in any other public announcement, by or on behalf of Green REIT (in each case) prior to the date of this Announcement; (iv) in each of the virtual datarooms hosted by Merrill and DFM Systems respectively in connection with the Acquisition on or prior to the date of this Announcement; or (v) as otherwise disclosed by or on behalf of Green REIT to Henderson Park (or its officers, employees, agents or advisers) prior to the date of this Announcement;

"EEA" means the European Economic Area;

"Effective" means in the context of the Acquisition: (i) if the Acquisition is implemented by way of a Scheme, the Scheme having become effective in accordance with its terms, upon the delivery to the Registrar of Companies of the Court Order together with the minute required by Section 86 of the Act confirming the Reduction of Capital and such Reduction of Capital having become effective upon the registration of the Court Order and minute by the Registrar of Companies; or (ii) if the Acquisition is implemented by way of a Takeover Offer, the Takeover Offer having been declared or become unconditional in all respects in accordance with the provisions of the Takeover Offer Document and the requirements of the Irish Takeover Rules;

"Effective Date" means the date on which the Acquisition becomes Effective;

"Effective Time" means the time on the Effective Date at which the Court Order is delivered to, and a copy of the minute required by Section 86 of the Act is registered by, the Registrar of Companies or, as the case may be, the Takeover Offer becomes or is declared unconditional in all respects in accordance with the Takeover Offer Documents and the requirements of the Irish Takeover Rules;

"EGM Resolutions" means the resolutions to be proposed at the EGM for the purposes of approving and implementing the Scheme, the Reduction of Capital, changes to the Constitution and such other matters as Green REIT reasonably determines to be necessary for the purposes of implementing the Acquisition or, subject to the consent of Henderson Park (which may not be unreasonably withheld, conditioned or delayed), desirable for the purposes of implementing the Scheme;

"End Date" means 11 December 2019 or such later date as Henderson Park and Green REIT may, with the consent of the Panel (if required), agree and (if required) the High Court may allow;

"EPRA NAV" means the Net Asset Value of Green REIT, adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term investment property business model in accordance with the European Public Real Estate Association Reporting - Best Practice Recommendations;

"EU" means the European Union;

"EU Merger Regulation" means Council Regulation (EC) No. 139/2004;

"euro" or "EUR" or "" means the lawful currency of Ireland;

"Euronext Dublin" means the Irish Stock Exchange plc, trading as Euronext Dublin;

"Euronext Dublin Listing Rules" means the Euronext Dublin Listing Rules for companies published by Euronext Dublin;

"Excluded Scheme Share" means the one Green REIT Share to be allotted and issued to Bidco under the terms of the Transaction Agreement;

"Expenses Reimbursement Agreement" means the expenses reimbursement agreement dated 13 August 2019 between Henderson Park, Bidco and Green REIT, the terms of which have been approved by the Irish Takeover Panel;

"Extraordinary General Meeting" or "EGM" means the extraordinary general meeting of the Green REIT Shareholders (and any adjournment thereof) to be convened in connection with the Scheme, expected to be convened as soon as the preceding Scheme Meeting shall have been concluded or adjourned (it being understood that if the Scheme Meeting is adjourned, the EGM shall be correspondingly adjourned);

"FCA" means the Financial Conduct Authority of the United Kingdom;

"Final Closing Date" means the date of a Takeover Offer having become (or having been declared) unconditional in all respects in accordance with the provisions of the Takeover Offer Document and the requirements of the Irish Takeover Rules;

"Final Recommendation Change Notice" means a written notice provided by the Independent Green REIT Board to Bidco in accordance with clause 5.2(e) of the Transaction Agreement;

"FSMA" means the Financial Services Markets Act 2000 of the United Kingdom;

"Governmental Body" means any Irish, UK or other foreign national or supranational, federal, state, local or other governmental or regulatory authority, agency, commission, board, body, bureau, arbitrator, arbitration panel, or other authority in any jurisdiction, including courts and other judicial bodies, or any competition, antitrust, foreign investment review or supervisory body, central bank or other governmental, trade or regulatory agency or body, securities exchange, stock exchange or any self-regulatory body or authority, including any instrumentality or entity designed to act for or on behalf of the foregoing, in each case, in any jurisdiction (provided it has jurisdiction over the applicable person or its activities or property);

"Green REIT" means plc, a company incorporated in Ireland with registered number 529378, having its registered office at 32 Molesworth Street, Dublin 2, D02 Y512, Ireland;

"Green REIT Alternative Proposal" means any bona fide enquiry, approach, communication, expression of interest, proposal or bona fide offer made by any person (other than a proposal or firm intention to make an offer under Rule 2.5 of the Irish Takeover Rules by Henderson Park or any of its Concert Parties) in respect of:

(a)           the acquisition of Green REIT by scheme of arrangement or takeover offer;

(b)           the direct or indirect acquisition by any person of 10% or more of the assets, taken as a whole, of the Green REIT Group, measured by either book value or fair market value (including equity securities of any member of the Green REIT Group);

(c)           a merger, reorganisation, share exchange, consolidation, business combination, recapitalisation, dissolution, liquidation or similar transaction involving Green REIT as a result of which the holders of Green REIT Shares immediately prior to such transaction would not, in the aggregate, own at least 90% of the voting power of the surviving or resulting entity in such transaction immediately after consummation of such transaction; or

(d)           the direct or indirect acquisition by any person (or the shareholders or stockholders of such person) of 10% or more of the voting power or the issued share capital of Green REIT, including any offer or exchange offer that if consummated would result in any person beneficially owning shares with 10% or more of the voting power of Green REIT;

"Green REIT Board" means the board of directors of Green REIT from time to time and for the time being;

"Green REIT Change of Recommendation" has the meaning given to that term in clause 5.2(d)(ii) of the Transaction Agreement;

"Green REIT Directors" means the members of the Green REIT Board;

"Green REIT Group" means Green REIT and all of its Subsidiaries;

"Green REIT Public Reports" means the annual report and audited financial statements of Green REIT for the 12 months ended 30 June 2018, the unaudited statement of interim results of Green REIT for the six months ended 31 December 2018, the Green REIT trading update released on 24 June 2019 and the unaudited statement of preliminary results of Green REIT for the 12 months ended 30 June 2019 published on or about the date of this Announcement;

"Green REIT Shareholders" means the holders of Green REIT Shares;

"Green REIT Shares" means the ordinary shares of €0.10 each in the capital of Green REIT;

"Green REIT Superior Proposal" means a written bona fide Green REIT Alternative Proposal (where each reference to 10% and 90% set forth in the definition of such term will be deemed to refer to 50%) that the Independent Green REIT Board determines in good faith (after consultation with Green REIT's financial advisers and outside legal counsel) is more favourable to Green REIT Shareholders than the Transactions, taking into account any revisions to the terms of the Transactions proposed by Henderson Park in accordance with clause 5.2(e) of the Transaction Agreement and such financial (including, where such Green REIT Alternative Proposal is not in respect of an acquisition of the entire issued and outstanding share capital of Green REIT, the total proceeds and value that may be due to Green REIT Shareholders), regulatory, anti-trust, legal, structuring, timing and other aspects of such proposal (including, for the avoidance of doubt, the conditionality of any such proposal) as the Independent Green REIT Board considers to be appropriate;

"Henderson Park" means Henderson Park Real Estate Management Ltd, incorporated in Jersey with registered number 121187 and having its registered office at 11-15 Seaton Place, St Helier Jersey, JE4 0QH, in its capacity as investment manager to the Henderson Park Funds;

"Henderson Park Directors" means the directors of Henderson Park from time to time and for the time being;

"Henderson Park Funds" means Henderson Park Real Estate Fund I US LP, Henderson Park Real Estate Fund I Non US LP, Henderson Park Real Estate Fund I TE LP and Henderson Park Real Estate Fund I US TE LP collectively;

"Henderson Park Group" means Henderson Park and Bidco, any Subsidiary of Henderson Park or Bidco, any Holding Company of Henderson Park or Bidco and any Subsidiary of any such Holding Company and shall include any fund managed or advised by Henderson Park;

"High Court" means the High Court of Ireland;

"Holding Company" has the meaning given to the term "holding undertaking" in Section 275 of the Act;

"IFRS" means International Financial Reporting Standards;

"Indebtedness" means any and all:

(a)        indebtedness for borrowed money, whether current or funded, secured or unsecured, including that evidenced by notes, bonds, debentures or other similar instruments (and including all outstanding principal, prepayment premiums, if any, and accrued interest, fees and expenses related thereto);

(b)        amounts owed with respect to drawn letters of credit;

(c)        cash overdraft; and

(d)        outstanding guarantees of obligations of the type described in sub-Clauses (i) through (iii) above;

"Independent Green REIT Board" means the independent committee of the Green REIT Board comprised of Gary Kennedy, Jerome Kennedy, Gary McGann and Rosheen McGuckian (or such other persons as may stand appointed from time to time) for the purpose of considering, and if thought fit, recommending the Acquisition to Green REIT Shareholders and, to the extent relevant, any Green REIT Alternative Proposal or Green REIT Superior Proposal;

"Independent Green REIT Directors" means the members of the Independent Green REIT Board from time to time;

"Investment Manager" means Green Property REIT Ventures Designated Activity Company, a private company limited by shares incorporated in Ireland and registered under Part 16 of the Act with registered number 529377 and having its registered office at 32 Molesworth Street, Dublin 2, Ireland;

"Investment Manager Agreement" means the investment manager agreement dated 12 July 2013 made between Green REIT and the Investment Manager;

"Ireland" means the island of Ireland, excluding Northern Ireland (the counties of Antrim, Armagh, Derry, Down, Fermanagh and Tyrone), and the word "Irish" will be construed accordingly;

"Irish Takeover Panel" means the Irish Takeover Panel established under the Takeover Panel Act;

"Irish Takeover Rules" means the Irish Takeover Panel Act 1997, Takeover Rules, 2013;

"Irrecoverable VAT" in relation to any person, any amount in respect of VAT which that person (or a member of the same VAT Group as that person) has incurred and in respect of which neither that person nor any other member of the same VAT Group as that person is entitled to a refund (by way of credit or repayment) from any relevant Tax Authority pursuant to and determined in accordance with Section 59 of the Value Added Tax Consolidation Act 2010 and any regulations made under that act or similar provision in any other jurisdiction; 

"JLL" means Jones Lang Lasalle Limited, a private company limited by shares, incorporated in Ireland with registered number 285474, having its registered office at Styne House, Hatch Street Upper, Dublin 2;

"J.P. Morgan Cazenove" means J.P. Morgan Securities plc (which conducts its UK and Ireland investment banking business as J.P. Morgan Cazenove);

"Law" means any applicable national, federal, state, local, municipal, foreign, supranational or other law, statute, constitution, principle of common law, resolution, ordinance, code, agency requirement, licence, permit, edict, binding directive, decree, rule, regulation, judgment, order, injunction, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body;

"Meetings" means the Scheme Meeting and the Extraordinary General Meeting;

"Merrill" means Merrill Communications LLC or any of its affiliates;

"Net Asset Value" means the measure shown in a company's balance sheet of all assets less all liabilities, which, in the case of Green REIT, is measured consistently with IFRS as adopted in the EU, and in particular will include Green REIT's property assets at their most recent independently assessed market values;

"Party" means each party to the Transaction Agreement;

"Performance Fee" means the performance fee payable to the Investment Manager in accordance with the terms of the Investment Manager Agreement;

"PRA" means the Prudential Regulation Authority;

"Properties" means the properties which are the subject of the valuation reports prepared by the Valuers, set out in Appendix IV;

"Reduction of Capital" means the reduction of the entire issued share capital of Green REIT by the cancellation of all Green REIT Shares in issue other than the Excluded Scheme Share to be effected as part of the Scheme under Sections 84 to 86 of the Act;

"Registrar of Companies" means the Registrar of Companies in Dublin, Ireland, as defined in Section 2 of the Act;

"REIT" means Real Estate Investment Trust;

"Red Book" means the current edition of the Royal Institution of Chartered Surveyors Valuation - Global Standards and the RICS Valuation - Professional Standards as adopted by the Society of Chartered Surveyors in Ireland;

"Relevant Authority" means any Irish, UK or other foreign national or supranational, federal commission, board, body, bureau, or other regulatory authority or agency, including courts and other judicial bodies, or any competition, anti-trust or supervisory body or other governmental, regulatory agency or body or securities exchange including any instrumentality or entity designed to act for or on behalf of any of the foregoing, in each case, in any jurisdiction;

"Resolutions" means collectively, the Scheme Meeting Resolution and the EGM Resolutions, which will be set out in the Scheme Document;

"Restricted Jurisdiction" means any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Acquisition is sent or made available in that jurisdiction;

"RICS" means the Royal Institution of Chartered Surveyors;

"Sanction Date" has the meaning set out in paragraph 2.3 of Appendix I;

"Scheme" means the proposed scheme of arrangement under Chapter 1 of Part 9 of the Act and the Reduction of Capital to effect the Acquisition under the terms of the Transaction Agreement, on the terms (including the Conditions) and for the Consideration set out in this Announcement and on such other terms as the Parties mutually agree in writing, including any revision of the scheme of arrangement as may be so agreed between the Parties and, if required, by the High Court;

"Scheme Document" means a document to be distributed to Green REIT Shareholders which shall contain, amongst other things: (i) the Scheme; (ii) the notice or notices of the Scheme Meeting and EGM; (iii) an explanatory statement as required by Section 452 of the Act with respect to the Scheme; (iv) such other information as may be required or necessary pursuant to the Act, the Irish Takeover Rules, the Euronext Dublin Listing Rules or the UK Listing Rules; and (v) such other information as Green REIT and Henderson Park may agree;

"Scheme Meeting" means the meeting or meetings of the Green REIT Shareholders or, if applicable, any class or classes of Green REIT Shareholders (including as may be directed by the High Court under Section 450(5) of the Act) (and any adjournment of any such meeting or meetings) convened by (i) resolution of the Green REIT Board or (ii) order of the High Court, in either case under Section 450 of the Act, to consider and vote on the Scheme Meeting Resolution;

"Scheme Meeting Resolution" means the resolution to be considered and voted on at the Scheme Meeting proposing that the Scheme, with or without amendment (but subject to such amendment being acceptable to each of Green REIT and Henderson Park, except for a technical or procedural amendment which is required for the proper implementation of the Scheme and does not have a substantive consequence on the implementation of the Scheme);

"Scheme Recommendation" means the unanimous recommendation of the Independent Green REIT Board that Green REIT Shareholders vote in favour of the Resolutions; 

"Subsidiary" has the meaning given to the term "subsidiary undertaking" in Section 275 of the Act;

"Takeover Offer" means an offer in accordance with clause 3.6 of the Transaction Agreement for the entire issued and to be issued ordinary share capital of Green REIT (other than any Green REIT Shares beneficially owned by any member of the Henderson Park Group (if any) or by any person Acting in Concert with Henderson Park (if any) not being a scheme of arrangement, including any amendment or revision thereto, the full terms of which will be set out in the Takeover Offer Document or, as the case may be, any revised offer document(s);

"Takeover Offer Document" means, if following the date of the Transaction Agreement, Bidco elects to implement the Acquisition by way of Takeover Offer in accordance with clause 3.6 of the Transaction Agreement, the documents to be despatched to Green REIT Shareholders and others by or on behalf of Henderson Park or Bidco (or such other entity as Henderson Park may elect) containing, amongst other things, the Takeover Offer, the Conditions (save insofar as not appropriate in the case of a Takeover Offer, and as amended in such manner as Henderson Park, Bidco (or such other entity as Henderson Park may elect) and Green REIT may determine, and the Panel may agree, to be necessary to reflect the terms of the Takeover Offer) and certain information about Henderson Park, Bidco (or such other entity) and Green REIT and, where the context so admits, includes any form of acceptance, election, notice or other document reasonably required in connection with the Takeover Offer;

"Takeover Panel Act" means the Irish Takeover Panel Act 1997;

"Takeover Regulations" means the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006;

"Tax Authority" means any Governmental Body responsible for the assessment, collection or enforcement of laws relating to taxes or for making any decision or ruling on any matter relating to tax (including the Irish Revenue Commissioners);

"Transaction Agreement" means the Transaction Agreement, dated 13 August 2019, between Henderson Park, Bidco and Green REIT in relation to the implementation of the Scheme and the Acquisition;

"Transactions" means the transactions contemplated by the Transaction Agreement, including the Acquisition;

"UK" means the United Kingdom of Great Britain and Northern Ireland;

"UK Listing Rules" means the listing rules made by the FCA under Part VI of the FSMA;

"Valuers" means CBREUC and JLL (each a "Valuer");

"VAT" means any tax imposed by any member state of the European Community in conformity with the Directive of the Council of the European Union on the common system of value added tax (2006/112/EC);

"VAT Group" a group as defined in Section 15 of the Value Added Tax Consolidation Act 2010 and any similar VAT grouping arrangement in any other jurisdiction; and

"Voting Record Time" means the time and date to be specified as the voting record time for the Scheme Meeting in the Scheme Document.

All amounts contained within this document referred to by "EUR" and/or "" refer to euro.

Any references to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.  Any reference to any legislation is to Irish legislation unless specified otherwise.

Words importing the singular shall include the plural and vice versa and words supporting the masculine shall include the feminine or neuter gender.

All times referred to in this Announcement are Irish times unless otherwise stated.
 

APPENDIX III

SOURCES AND BASES OF INFORMATION

In this Announcement, unless otherwise stated or the context otherwise requires, the bases of calculation and sources of information are as described below. 

a)   The financial information relating to Green REIT is extracted from the Green REIT Public Reports. 
b)   The value of the Acquisition is based upon the Consideration due under the terms of the Acquisition and on the basis of the issued and to be issued share capital of Green REIT referred to in paragraph c) below.
c)   The issued and to be issued share capital of Green REIT is calculated on the basis of the number of issued Green REIT Shares as at the close of business on 13 August 2019 (being the last practicable date prior to the release of this Announcement), being 699,469,638 Green REIT Shares, Green REIT having confirmed in the Transaction Agreement that as of 13 August 2019 there were no outstanding securities convertible into, or rights or options to subscribe for, Green REIT Shares.
d)   Unless otherwise stated, all prices for Green REIT Shares are the Closing Price for the relevant dates.
e)   The prices of Green REIT Shares used for the premium calculations are:
i.    €1.534, being Green REIT's closing share price on 12 April 2019 (being the last Business Day prior to the announcement of the commencement of a sales process for Green REIT on 15 April 2019);
ii.   approximately €1.444, being Green REIT's volume weighted average share price over the 180 trading day period ending on 12 April 2019; and
iii.  €1.824, being Green REIT's closing share price on 13 August 2019 (being the last Business Day prior to the publication of this Announcement).
f)   The volume weighted average closing price per Green REIT Share for the 180 trading day period ending on 12 April 2019 is derived from data provided by Bloomberg.

g)   The statement that over a six year period to 30 June 2019, Green REIT has nearly doubled its EPRA NAV per share from 96.7c to 187.1c is based on the publicly disclosed EPRA NAV per share for Green REIT as set out in Green REIT's published financial reports during that period.

h)   The statement that total shareholder return over the same period was 109%, compared to 27% for the FTSE 350 Real Estate Super Sector and 62% for ISEQ is based on total shareholder return figures provided by Datastream as at 13 August 2019.

i)    The statement that Green REIT's share price has largely traded at a discount to the EPRA NAV of its assets since February 2016 is based on the publicly disclosed EPRA NAV per share for Green REIT as set out in Green REIT's published financial reports during that period, compared to the closing prices of Green REIT Shares for the corresponding period.

 

 

APPENDIX IV

 

Property Valuation Reports

Part A: Valuation Report of CBRE Unlimited Company pursuant to Rule 29.1(a) of the Irish Takeover Rules

 CBRE

Connaught House

1 Burlington Road

Dublin 4

 

Switchboard +353 (0) 1 618 5500

Fax +353 (0) 1 668 8850

 

VALUATION REPORT

In respect of:

21 Properties comprising Investment and Development Assets

On behalf of:

 

Green REIT plc, J.P. Morgan Securities plc and J & E Davy

 

 

Date of Valuation Report: 13 August 2019

 

 

 

 

 

 

 

 

VALUATION REPORT

Report Date

13 August 2019

Addressees

The Directors

Green REIT plc

32 Molesworth Street

Dublin

D02 Y512

 

(referred to as the "Company")

 

The Directors

J.P. Morgan Securities plc

25 Bank Street

Canary Wharf

London

E14 5JP

United Kingdom

(referred to as "JP Morgan")

in their capacity as Lead Financial Advisor

 

The Directors

J & E Davy

49 Dawson Street

Dublin

D02 PY05

(referred to as "Davy")

in their capacity as Joint Financial Advisor and Rule 3 Advisor

 

(collectively referred to as the "Addressees") 

The Properties

The properties held by the Company as listed in the Schedule of Property Details set out in Appendix A below

 

We understand that the Company owns 100% of the Properties.

Ownership Purpose

Investment and Development.

Instruction

To value the unencumbered freehold/long-leasehold interests in the Properties (as relevant) on the basis ofMarket Value as at the valuation date in accordance with the terms of engagement entered into between CBRE and the Addressees dated 13 August 2019 ("LOE").

Valuation Date

The valuation date is 30 June 2019. 

We are satisfied that an updated valuation of the Properties at 13 August 2019 would not be materially different to the Valuations (as defined below) set out in this report.

We are aware that the Company initiated a sale process for the sale of the Company or its portfolio of assets on 15 April 2019.  We understand that there was a two round bidding process with dates either side of our valuation date 30 June.  We understand that several parties made bids in the second round for the entire issued and to be issued share capital of the Company.  We have not been made aware of the level of these bids.

Capacity of Valuer

External Valuer, as defined in the RICS Valuation - Global Standards 2017 and as an "independent valuer" for the purposes of Rule 29 of the Irish Takeover Rules.

Purpose

Please note that the Valuations (as defined below) may be investigated by the RICS for the purposes of the administration of the RICS's conduct and disciplinary regulations in order to ensure compliance with the Valuation Standards.

We have been appointed to undertake valuations of each of the properties listed at Appendix A attached (the "Properties", each a "Property") for the purposes of Rule 29 of the Irish Takeover Rules (the "Valuations") for inclusion in the Rule 2.5 Announcement to be issued by the Company in connection with the proposed acquisition of the entire issued and to be issued share capital of the Company..

The Valuation has been prepared for a Regulated Purpose as defined in the current version of the RICS Valuation - Global Standards and the RICS Valuation - Professional Standards (the "Red Book"), incorporating the International Valuation Standards.

The Valuations have been prepared on the basis of Market Value as defined in the current edition of the Red Book and in the- CBRE VALUATION STANDARD TERMS OF BUSINESS AND GENERAL PRINCIPLES AND ASSUMPTIONS IRELAND General Principles and Assumptions adopted in the preparation of Valuations and Reports attached to the Letter of Instruction dated 13 August 2019 "), as set out in the LOE which are subject to the CBRE Valuation Standard Terms of Business and Valuation General Principles and Assumptions (sections A and B) (the "VSTOB").

We would draw your attention to the fact that where our appointment is from an entity to which the European Parliament and Council Directive 2011/61/EU (the "Directive"), concerning Alternative Investment Fund Managers ("AIFM"), applies (a "Fund"), our role is limited to providing valuations of individual property assets or liabilities (based on the assumptions as set out within our valuation report) - not the net asset value ("NAV") of either the Fund or the individual properties within the Fund.

The Company has confirmed that the 'valuation function' under the Directive is performed by the Alternative Investment Fund Manager, Green Property REIT DAC (the "Investment Manager").  Our role as valuer is limited to providing valuations of certain property assets of the Company in accordance with the Red Book and the terms set out in this letter; and we are not acting as valuers of the Company itself; the valuation function of the Company and the setting of the net asset value of the Company remains with Green Property REIT Ventures DAC.

Aggregate Market Value

€963,871,000

(Nine Hundred and Sixty Three Million Eight Hundred and Seventy One Thousand EURO)

exclusive of purchaser's costs and exclusive of VAT.

 

Our opinion of Market Value is based upon the Scope of Work and Valuation Assumptions attached, and has been primarily derived using comparable recent market transactions on arm's length terms. 

We have valued the Properties individually and no account has been taken of any discount or premium that may be negotiated in the market if all or part of the portfolio was to be marketed simultaneously, either in lots or as a whole.

 

For the avoidance of doubt, we have valued the Properties as real estate and the values reported herein represent 100% of the market values of the assets.  No account has been taken in reporting these market values of the extent of the Company's interests in the companies holding the subject Properties. 

 

We are aware that the Company initiated a sale process for the sale of the Company or its portfolio of assets on 15 April 2019.  We understand that there was a two round bidding process with dates either side of our valuation date 30 June.  We understand that several parties made bids in the second round for the entire issued and to be issued share capital of the Company.  We have not been made aware of the level or details of these bids, which would in addition take account of significant factors in addition to the values attributed by bidders to the individual Properties.

 

There are no negative values to report. 

Market Conditions

The values stated in this report represent our objective opinion of Market Value in accordance with the definition set out above as of the date of valuation. Amongst other things, this assumes that the Properties had been properly marketed and that exchange of contracts took place on this date.

Material Difference

In accordance with Rule 29.5 of the Irish Takeover Rules, we have been asked to confirm that a current valuation of the Properties would not be materially different to the valuation as at 30 June 2019.

 

We hereby confirm that as at the date of this report:

 

(i) we have not become aware (after having made enquiry of the Company) of any material change since 30 June 2019 in any matter relating to any property covered by our Valuation Report which in our opinion would cause a current valuation to be materially different to that reported herein, and

 

(ii) in relation to market conditions and movements in the property markets in which the properties covered by our Valuation Report are located, based on observed transactions involving comparable properties which have occurred and independent data published, in each case, since 30 June 2019, we do not consider that the movement in respect of the subject properties opinion would cause a current valuation to be materially different.

Report Format

Appendix A of this Valuation Report provides the Schedule of Property Details of the subject properties and Market Values, including certain information on the Properties in the Course of Development required under 29.2 (c) of the Irish Takeover Rules.

Compliance with Valuation Standards

The valuations have been prepared in accordance with the Red Book.  The property details on which each valuation is based are as set out in this report.

 

The valuations are compliant with the International Valuation Standards and are in accordance with Rule 29 of the Irish Takeover Rules.

 

We confirm that we have sufficient current local and national knowledge of the particular property market involved and have the skills and understanding to undertake the valuations competently.

 

Where the knowledge and skill requirements of the Red Book have been met in aggregate by more than one valuer within CBRE, we confirm that a list of those valuers has been retained within the working papers, together with confirmation that each named valuer complies with the requirements of the Red Book.

 

These Valuations are a professional opinion and are expressly not intended to serve as a warranty, assurance or guarantee of any particular value of the subject property. Other valuers may reach different conclusions as to the value of the subject property. These Valuations are for the sole purpose of providing the intended user with the valuer's independent professional opinion of the value of the subject property as at the valuation date.

Development

Properties held for Development or in the Course of Development or extensive refurbishment have been valued on the Residual (Development Appraisal) Method or by having regard to comparable land sales.

The Residual (Development Appraisal) Method is the commonly practised method of valuing development property, whereby the estimated total costs of realising the proposed development (including construction costs, fees and other on-costs, contingencies, costs of finance and developer's profit) are deducted from the gross development value of the completed project to determine the residual land value. Where appraisal methods have been used, the results have been cross checked by reference to comparison sales prices per hectare/acre.

 

It should be noted that property values derived from a Residual Development Appraisal calculation are extremely sensitive to minor changes in any of the inputs. Whilst we have checked the information provided to us against available sources of information and provided for a level of profit which in our opinion reflects the level of risk inherent in the project, unforeseen events such as delays in timing, minor market movements etc. can have a disproportionate effect on the resulting value. Land values have been benchmarked against comparable transactions where available and reflect our opinion as at the date of the Valuation. Should information which we were not made aware of at the time of the Valuations subsequently come to light following the date of this valuation report which changes our view on any of the input variables adopted, then the value reported is subject to change and we reserve the right to amend our valuation figures accordingly.

Where we have carried out a residual appraisal, the appraisal adopts assumptions that we consider a prospective purchaser would make in relation to inputs such as rental growth and profit level. These inputs are reflective of the current strength of demand in the residential development land market. Should these market conditions change these assumptions could also change, potentially resulting in a residual value which is materially lower.

Assumptions

We have made various assumptions as to tenure, letting, taxation, town planning, and the condition and repair of buildings and sites - including ground and groundwater contamination - as set out below.

 

If any of the information or assumptions on which the valuations are based are subsequently found to be incorrect, the valuation figures may also be incorrect and should be reconsidered.

Variation from Standard Assumptions

None

Special Assumptions

None

Verification

We recommend that before any financial transaction is entered into based upon these valuations, you obtain verification of the information contained within our report and the validity of the assumptions we have adopted.

 

We would advise you that whilst we have valued the Properties reflecting current market conditions, there are certain risks which may be, or may become, uninsurable. Before undertaking any financial transaction based upon these valuations, you should satisfy yourselves as to the current insurance cover and the risks that may be involved should an uninsured loss occur.

Valuer

The Properties have been valued and previously inspected by valuers who are qualified for the purpose of the valuation in accordance with the Red Book.

Independence

The total fees, including the fee for this assignment, earned by CBRE Unlimited Company (or other companies forming part of the same group of companies within Ireland) from the Addressee (or other companies forming part of the same group of companies) are less than 5.0% of the total Irish revenues.

 

It is not anticipated this situation will vary in the financial year to 31 December 2019.

 

We confirm that we do not have any material interest in the Company or the Properties.

 

We confirm that neither the individual valuers appointed for this instruction, nor CBRE, have any material connection to any party to this Proposed Transaction other than the Company which would cause us or them not to qualify as an "independent valuer" for the purposes of Rule 29.1(a) of the Irish Takeover Rules.

 

We confirm that CBRE have valued the subject properties on behalf of the Company on a six-monthly basis since December 2013, 31.

Disclosure

The principal signatory of this report has continuously been the signatory of valuations for the same addressee since December 2013.

 

We confirm that CBRE has been valuing part of the Company's portfolio of assets on a bi-annual basis since 2013.  The individual assets within the portfolio have changed over this period. The nine assets at Central Park were added to the remit of CBRE in 31 December 2017 this date.

CBRE Offices Department are the letting agents for Central Park.

CBRE Offices and Retail Departments are the letting agents for One Molesworth Street.

CBRE Asset Services are the property managers for Central Park.

In April 2019 CBRE Ltd (in the UK) Capital Advisers team were appointed as property advisers in relation to the acquisition of the Company.

Conflicts of Interest

We do not consider that any conflict of interest arises in us preparing this valuation report or in connection with our current or previous engagement by the Company and the Company has confirmed to us that it also considers this to be the case.

 

We confirm that copies of our conflict of interest checks have been retained within the working papers of the file.

Reliance

This report may be relied on by the Company, JP Morgan and Davy (as set out in Addressees) for the specific purpose set out herein and no responsibility is accepted to any other third party for the whole or any part of its contents.

 

No reliance may be placed upon the contents of this Valuation Report by any party for any purpose other than in connection with the Purpose of the Valuation.

Publication

Neither the whole nor any part of our report nor any references thereto may be included in any published document, circular or statement nor published in any way without our prior written approval of the form and context in which it will appear. 

Such publication of, or reference to this report will not be permitted unless it contains a sufficient contemporaneous reference to any departure from the Red Book, incorporating the IVSC International Valuation Standards issued June 2017.

 

Yours faithfully

 

 

 

 

/s/ Peter Lundy

 

Peter Lundy MRICS

Senior Director

RICS Registered Valuer

 

For and on behalf of

CBRE Unlimited Company

Yours faithfully

 

 

 

 

/s/ Bruce Campbell

 

Bruce Campbell MRICS MSCSI

Senior Director

RICS Registered Valuer

 

For and on behalf of

CBRE Unlimited Company

 

 

T: +353 1 618 5517

T:  +353 1 618 5587

E: [email protected]

E: [email protected]

 

 

CBRE, Connaught House, 1 Burlington Road, Dublin 4

T:  +353 (0) 1 618 5500

F:  +353 (0) 1 668 8850

W: www.cbre.ie

 

 

 

 

     

 

 

 

SCOPE OF WORK & SOURCES OF INFORMATION

Sources of Information

We have carried out our valuations based upon information supplied to us, by Ms Caroline McCarthy of Green Property REIT Ventures DAC acting on behalf of the Company, which we have assumed and will assume to be correct and comprehensive.

Information provided to date includes:

•      Green REIT plc provided tenancy schedules as at June 2019 detailing summary lease information, floor areas, rents and any rent abatements / tenant incentives. The most recent update to the tenancy schedules was provided to us on 5th July 2019.

•      Various ShareFile folders with lease documents, side letters, deeds of variations, agreement for leases, rent review memorandums, licences and other relevant tenancy information. Green Property REIT Ventures DAC have used the ShareFile system for sharing information with CBRE since September 2017.

•      Details of terms with prospective new tenants:

-       Everyman Heads of Terms for One Molesworth Street dated 6th February 2019

-       Boots Heads of Terms for One Molesworth Street dated 7th May 2019

-       Headline terms with new tenant for Block I Central Park, provided verbally on inspection date - 19th June 2019

-       Heads of terms for Units 3 & 4 at Arena dated 6th and 7th of June 2019

•      Service charge information including annual rates per sq ft for individual buildings.  

•      Planning information where relevant

Development costs and costs outstanding for relevant assets (where relevant). The most recent Cap Ex schedule provided to us by Green Property REIT Ventures DAC is dated 23rd July 2019 and reflects Cap Ex as at 30 June 2019.

•      Measured Surveys, prepared by CBRE Ltd (in the UK), dated June 2019

•      Building Surveys Reports, prepared by CBRE Ltd, dated June 2019

•      Environmental Assessment Reports, prepared by CBRE Ltd, dated June 2019

We have relied upon the information provided to us as being fully accurate.

Inspections

We originally inspected the Properties internally for the purpose of the December 2013 valuation. 

We were not required by the Company to carry out additional inspections for this engagement, however we did carry out drive-by inspection of all of the Properties in August 2019.

Various inspections of individual Properties have happened since that date.

The Central Park properties were added to our valuation schedule for the December 2017 valuation and were inspected on 27 September 2017. Some internal inspections were limited due to tenant's occupation. At the time, sample floors were inspected in five of the six completed office buildings. Block H Central Park was re-inspected on 12 June 2018, on the same date, a sample floor in Block C was also inspected. On 12th November 2018, we inspected the Bank of America space in Block C and the external of Block I, which was under construction at the time. Block I Central Park was inspected again on 19 June 2019.

One Albert Quay was inspected on acquisition in February 2016.

One Molesworth Street was inspected on 7 December 2017, the 8 June 2018 and again on the 16 November 2018.

Horizon Business Park has been inspected on a number of occasions but most recently an external inspection of the park was carried out on the 19th of June 2019 with Units D6 & D7 inspected internally on that date.

We have carried out drive-by inspections of all of these properties for the purpose of this exercise. The inspections were undertaken by Bruce Campbell MRICS MSCSI, Director, Gemma Gallagher MRICS MSCSI Consultant, Olivia Farrell MRICS MSCSI Consultant and Sorcha deEyto MRICS MSCSI Consultant.

Revaluation Without Inspection

As instructed, we have not re-inspected the Properties for the purpose of this valuation. Green Property REIT Ventures DAC acting on behalf of the Company has confirmed that they are not aware of any material changes to the physical attributes of the Properties, or the nature of their location, since the last inspection. We have assumed this advice to be correct.

Areas

We have not measured the Properties but have relied on floor areas provided to us by Green Property REIT Ventures DAC acting on behalf of the Company in the form of measured survey reports, dated June 2019. These have been prepared by CBRE Ltd Building Consultancy Division London and we have assumed that all floor areas provided are correct and comprehensive.

 

The floor areas have been calculated using Gross External Area (GEA), Gross Internal Area (GIA), IPMS and Net Internal Area (NIA) in accordance with standard measuring practice in Ireland.

In February 2016, International Property Measurement Standards (IPMS) was introduced for the measurement of office space in Ireland. Except for Blocks H and I Central Park, we have not been provided with IPMS floor areas. The Company has instructed us to adopt Net Internal Area (NIA) for the remaining office properties. 

The floor areas for the office blocks at Central Park have been calculated using Gross Internal Area, with the exception of Block H and Block I which have been calculated using IPMS2.

Environmental Matters

Phase I Environmental Assessments were carried out on each Property by CBRE Ltd London in June 2019.  We have reviewed these reports and note that each property provides a low contamination risk rating.

Services and Amenities

We understand that all main services including water, drainage, electricity and telephone are available to the Properties.

None of the services has been tested by us.

Repair and Condition

We have not carried out building surveys, tested services, made independent site investigations, inspected woodwork, exposed parts of the structure which were covered, unexposed or inaccessible, nor arranged for any investigations to be carried out to determine whether or not any deleterious or hazardous materials or techniques have been used, or are present, in any part of the Properties. We are unable, therefore, to give any assurance that the Properties are free from defect.

 

CBRE Ltd London carried out Building Survey Reports for each Property. We reviewed each report and noted that the majority of expenditure items would fall under the category of general repairs and maintenance, being covered through each Property's specific service charge / tenant lease covenants. Where this is not the case, these items have been deducted from our valuation.

Town Planning

We have not undertaken planning enquiries.

Titles, Tenures and Lettings

Details of title/tenure under which the Properties are held and of lettings to which it is subject are as supplied to us. We have not generally examined nor had access to all the deeds, leases or other documents relating thereto. Where information from deeds, leases or other documents is recorded in this report, it represents our understanding of the relevant documents. 

We understand that the Properties are held freehold or long leasehold and free of encumbrances, restrictions or outgoings of an onerous nature other than those indicated to us at the time of our inspection (or to which our attention has since been drawn) which would affect value.

We should emphasise, however, that the interpretation of the documents of title (including relevant deeds, leases and planning consents) is the responsibility of your legal adviser.

 

We have not conducted credit enquiries on the financial status of any tenants. We have, however, reflected our general understanding of purchasers' likely perceptions of the financial status of tenants.

 

 

 

VALUATION ASSUMPTIONS

Introduction

An Assumption is defined in the Red Book Glossary and Appendix 3 to be a "supposition taken to be true" (an "Assumption").

 

Assumptions are facts, conditions or situations affecting the subject of, or approach to, a valuation that it has been agreed need not be verified by the valuer as part of the valuation process. Assumptions are made when it is reasonable for the valuer to accept that something is true without the need for specific investigation.

 

The addressee has confirmed and we confirm that our Assumptions are correct as far as the addressee and we, respectively, are aware. In the event that any of these Assumptions prove to be incorrect then our valuations should be reviewed. The principal Assumptions which we have made are stated within this valuation report.

 

For the avoidance of doubt, the Assumptions made do not affect compliance with the approach to Market Value under the Red Book.

Capital Values

The valuations have been prepared on the basis of "Market Value", which is defined in the Red Book as: 

"The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's-length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion."

The valuation represents the figure that would appear in a hypothetical contract of sale at the valuation date. No adjustment has been made to this figure for any expenses of acquisition or realisation - nor for taxation which might arise in the event of a disposal.

No account has been taken of any inter-company leases or arrangements, nor of any mortgages, debentures or other charge.

No account has been taken of the availability or otherwise of capital based Government or European Community grants.

Taxation, Costs and Realisation Costs

As stated above, no allowances have been made for any expenses of realisation or for taxation which might arise in the event of a disposal.

 

Our valuations reflect purchasers' statutory and other normal acquisition costs.

VAT

We have not been advised whether the Properties are elected for VAT, however we understand that VAT is not applicable to the residential assets.

Our valuations are exclusive of VAT. 

 

All rents stated in this report are exclusive of VAT.

Rental Values

Unless stated otherwise rental values indicated in our report are those which have been adopted by us as appropriate in assessing the capital value and are not necessarily appropriate for other purposes, nor do they necessarily accord with the definition of Market Rent in the Red Book, which is as follows:

"The estimated amount for which an interest in real property should be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm's-length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion."

The Properties

Where appropriate we have regarded the shop fronts of retail and showroom accommodation as forming an integral part of the building.

 

Landlord's fixtures such as lifts, escalators, central heating and other normal service installations have been treated as an integral part of the building and are included within our valuations.

 

Process plant and machinery, tenants' fixtures and specialist trade fittings have been excluded from our valuations. 

 

All measurements, areas and ages quoted in our report are approximate.

Environmental Matters

In the absence of any information to the contrary, we have assumed that:

(a) the Properties are not contaminated and is not adversely affected by any existing or proposed environmental law;

 

(b) any processes which are carried out on the Properties which are regulated by environmental legislation are properly licensed by the appropriate authorities;

 

(c) we have not been supplied with a copy of the "Building Energy Rating" Certificate for the Properties. We have assumed that if the Properties are sold, let or transacted that it possesses a current Energy Rating Certificate as required under the European Union (Energy Performance of Buildings) Regulations 2012 (S.I. 243 of 2012);

 

(d) the Properties are either not subject to flooding risk or, if they are, that sufficient flood defences are in place and that appropriate building insurance could be obtained at a cost that would not materially affect the capital value;

 

e) invasive species such as Japanese Knotweed are not present on the Properties.

 

High voltage electrical supply equipment may exist within, or in close proximity of, the Properties. The National Radiological Protection Board (NRPB) has advised that there may be a risk, in specified circumstances, to the health of certain categories of people. Public perception may, therefore, affect marketability and future value of the Property. Our Valuations reflects our current understanding of the market and we have not made a discount to reflect the presence of this equipment.

Repair and Condition

In the absence of any information to the contrary, we have assumed that:

 

(a) there are no abnormal ground conditions, nor archaeological remains, present which might adversely affect the current or future occupation, development or value of the Properties;

 

(b) the Properties are free from rot, infestation, structural or latent defect;

 

(c) no currently known deleterious or hazardous materials or suspect techniques, including but not limited to Composite Panelling, have been used in the construction of, or subsequent alterations or additions to, the Properties; and

 

(d) the services, and any associated controls or software, are in working order and free from defect.

 

We have otherwise had regard to the age and apparent general condition of the Properties. Comments made in the property details do not purport to express an opinion about, or advise upon, the condition of uninspected parts and should not be taken as making an implied representation or statement about such parts.

Title, Tenure, Lettings, Planning, Taxation and Statutory & Local Authority Requirements

Unless stated otherwise within this report, and in the absence of any information to the contrary, we have assumed that:

(a) the Properties possess a good and marketable title free from any onerous or hampering restrictions or conditions;

(b) all buildings have been erected either prior to planning control, or in accordance with planning permissions, and have the benefit of permanent planning consents or existing use rights for their current use;

 

(c) the Properties are not adversely affected by town planning or road proposals;

 

(d) all buildings comply with all statutory and local authority requirements including building, fire and health and safety regulations;

 

(e) only minor or inconsequential costs will be incurred if any modifications or alterations are necessary in order for occupiers of each Property to comply with the provisions of the relevant disability discrimination legislation;

 

(f) there are no tenant's improvements that will materially affect our opinion of the rent that would be obtained on review or renewal;

 

(g) tenants will meet their obligations under their leases, and are responsible for insurance, payment of business rates, and all repairs, whether directly or by means of a service charge;

 

(h) there are no user restrictions or other restrictive covenants in leases which would adversely affect value;

 

(i) where appropriate, permission to assign the interest being valued herein would not be withheld by the landlord where required;

 

(j) vacant possession can be given of all accommodation which is unlet or is let on a service occupancy;

 

(k) wherever rent reviews or lease renewals are impending, all notices have been fully validly served within the appropriate time limits; and

 

(l) stamp duty will apply at the rate currently applicable in Ireland.

 

 

Appendix A: Properties Details

Property Details: Properties held for Investment - Office

Property

Description

Tenancy

Passing Rent per Annum

One Molesworth Street , Dublin 2

Modern five storey over basement office and retail property.  Total floor area 89,548 sq ft.

Tenants include Barclays, Goshawk, TD Global and The Ivy

€4,787,927

30, 31 & 33 Molesworth Street, Dublin 2

Three storey over basement Georgian office buildings with a modern office extension to the rear measuring 25,718 sq ft NIA.

Multi-let buildings producing a WAULT of 8.17 years.

€684,990

No 32 Molesworth Street,
Dublin 2

Modern three storey over basement 3rd generation office building measuring 32,271 sq ft NIA.

Entire building is let to Maples FS under a 20 year lease from January 2017 with a break in year 10.

€1,673,122

Fitzwilliam Hall,
Dublin 2

Modern office building with a mock Georgian façade, including a Georgian building on Fitzwilliam Place

Single let building to a serviced office provider producing €1,400,000 per annum.

€1,400,000

Block B Central Park, Leopardstown, Dublin 18

Modern office building at the entrance to Central Park.

Single let to Ulster Bank producing €2,245,000 per annum

€2,245,000

Block C Central Park, Leopardstown, Dublin 18

Multi-let modern office building comprising 76,628 sq ft GIA.

Tenants include Leaseplan, Bank of America and RGA International

€1,949,133

Block D Central Park, Leopardstown, Dublin 18

Modern office building of 76,357 sq ft and 202 car spaces.

Let to Bank of America Merrill Lynch.

€2,270,056

Block E Central Park, Leopardstown, Dublin 18

Substantial modern office building of 264,888 sq ft and 769 car spaces.

Fully let to Vodafone.

€7,298,225

Block G Central Park, Leopardstown, Dublin 18

Modern multi-let office building of 199,596 sq ft and 220 car spaces.

Multi-let to Sage, Hostelworld, Salesforce and Tullow Oil.

€5,425,696

Block H Central Park, Leopardstown, Dublin 18

Modern office building of 157,238 sq ft and 300 car spaces.

Fully let to AIB Bank on a 20 year lease from 29 May 2017.

€4,797,588

Block I Central Park, Leopardstown, Dublin 18

Recently completed office building of 102,781 sq ft and 156 car spaces.

The top two, sixth and seventh, floors have been let to Genesis Aircraft Services.  The remaining floors are vacant.

€1,000,396

One Albert Quay, Cork

Modern six storey over basement office building in Cork city comprising 166,264 sq ft and 162 car spaces

Tenants include Investec, Ove Arup, Ardmore Shipping, PWC, Tyco Ireland and Starbucks

€4,125,032

 

Property Details: Properties held for Investment - Retail

Property

Description

Tenancy

Passing Rent per Annum

1-2 College Green,
Dublin 2

City Centre retail unit.  Ground floor and basement.

Let to Starbucks on a 25 year lease from 1 July 2005.

€185,000

4-5 College Green,
Dublin 2

City Centre retail unit.  Ground floor and basement.

Let to Londis on a 24.3 year lease from 28 June 2004.

€130,000

Block P Central Park, Leopardstown, Dublin 18

Retail property within the Central Park campus.  Ground floor convenience store and first floor restaurant.

Let to Centra and Baan Siam Cuisine.

€129,750

 

 

 

 

 

Property Details: Properties held for Investment - Industrial

Property

Description

Tenancy

Passing Rent per Annum

Units 3, 4, 5, B1, B2, D2, D3, D4, D5, D6 & D7 Horizon Business Park, Swords, Co Dublin

11 modern detached industrial units located within an industrial estate close to the Airport and the M50 and M1 motorways.

Tenants include Avec Logistics, Kintetsu, Kuehne & Nagle, DFS Bulgari, and Fastway.  Three units are vacant.

€4,205,544

 

 

 

Property Details: Properties held for Investment - Mixed Use

Property

Description

Tenancy

Passing Rent per Annum

The Arena Centre, Tallaght, Dublin 24

Suburban Dublin mixed use commercial complex

Tenants include Bank of Ireland, Woodies, Maldron Hotel, Lidl, Maxi Zoo

€4,294,904

 

 

 

 

 

 

 

Property Details: Property in the Course of Development

 

Property

Description

Units D2 (ext)  Horizon Business Park, Swords, Co Dublin

Unit  D9

Horizon Business Park, Swords, Co Dublin

 

Industrial units currently under construction

 

 

 

 

Property Details: Land bank

 

Property

Description

Site Area (state measurement unit)

Surplus land at Horizon Logistics Park

282.87 acres of development land zoned objective GE : "provide opportunities for the general enterprise and employment.  5.2 acres of this holding are zoned Open Space.

282.87 acres

Surplus Land at Central Park, Sandyford, Dublin 18

4.7 acres Zoned GZT: Commerce / Industry / Enterprise / Economic Development

4.7 acres

 

 

 

Part B: Valuation Report of Jones Lang LaSalle Limited pursuant to Rule 29.1(a) of the Irish Takeover Rules

Jones Lang LaSalle Limited

Styne House

Upper Hatch Street

Dublin

D02 DY27

 

tel: +353 1 6731600

fax: +353 1 6795147

DDE Box No.56

[email protected]

Jll.ie

 

The Directors
Green REIT plc
32 Molesworth Street
Dublin 2

 

and

 

J&E Davy
Davy House

49 Dawson Street

Dublin 2 

 

and

 

J.P. Morgan Securities plc
(carrying on its UK investment banking activities under the name J.P. Morgan Cazenove)

25 Bank Street

London EI4 5JP

 

 

Our ref 

  PJD 

 

[email protected]

 

 

13 August 2019

 

 

Dear Sirs

Terms of Reference

Addressee:

 

The Directors
Green REIT plc (the "Company")

And

J&E Davy

And

J.P. Morgan Securities plc

Properties:

 

Certain of the property assets of the Company which are at Appendix 1 (the "Properties", and each a "Property").

Instruction:

 

In accordance with our engagement letter entered into between Jones Lang LaSalle Limited ("JLL") and the Company dated 13 August 2019 (the "Engagement Letter") we have considered the Properties listed below in order to provide you with our opinion of Market Value of the freehold / equivalent long leasehold interests held in the Properties as at the Valuation Date.

We have also been asked to provide a confirmation that a current valuation, in this case at the date of the announcement pursuant to Rule 2.5 of the Irish Takeover Rules (the "Rule 2.5 Announcement"), would not be materially different from the Valuations herein provided i.e. as at 30 June 2019.

We have been appointed to undertake valuations of the Properties (the "Valuations") in accordance with the RICS Valuation - Global Standards incorporating the IVSC International Valuation Standards and IFRS 13 (the "RICS Red Book") and the requirements of Rule 29 of Rule 29 of the Irish Takeover Panel Act 1997, Takeover Rules 2013 (the "Irish Takeover Rules").This Valuation Report and its appendices (the "Valuation Report") are provided in accordance with the Engagement Letter.

The Valuation Report is subject to, and should be read in conjunction with the General Terms and Conditions of Business and our General Principles Adopted in the Preparation of Valuations and Reports which are appended to the Valuation Report issued to the Addressee.

Purpose of Valuation:

 

We understand that the Valuation Report, is required for the purpose (the "Purpose") of providing an opinion on the valuation of the Properties for the purposes of Rule 29 of the Irish Takeover Rules for inclusion in an announcement pursuant to Rule 2.5 of the Irish Takeover Rules (the "Rule 2.5 Announcement") published by or on behalf of the Company in connection with the proposed disposal of the entire issued and to be issued share capital of the Company to be implemented by scheme of arrangement or other means (the "Proposed Transaction").

Basis of Valuation:

 

The basis of value for this Valuation Report as required by the Irish Takeover Rules is Market Value and therefore the Valuations have been prepared on a Market Value basis as defined by the RICS Red Book as:

 

'The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion.'

Valuation Date:

The valuation date of the Properties is 30 June 2019.

Compliance with
Valuation Standards:

The valuation of the Properties has been prepared for a Regulated Purpose in accordance with the RICS Red Book, in compliance with the Irish Takeover Rules.

We confirm that we have sufficient current local and national knowledge of the particular property market involved and have the skills and understanding to undertake the valuations competently.

The Valuations are a professional opinion and are expressly not intended to serve as a warranty, assurance or guarantee of any particular value of the Properties. Other valuers may reach different conclusions as to the value of the Properties. The Valuations are for the sole purpose of providing the intended user with the valuer's independent professional opinion of the value of the Properties as at the Valuation Date.

Status of Valuer:

We have been appointed by the Addressees and have acted as an "external valuer" as defined in the RICS Red Book and, in the case of Rule 29 of the Irish Takeover Rules, as an "independent valuer" as defined in the Irish Takeover Rules.

We confirm that the personnel responsible for the Valuation Report are qualified for the purposes of the Valuation Report in accordance with the RICS Valuation Standards and have the knowledge, skills, experience and understanding to undertake the Valuation Report competently, including to the extent required by Rule 29 of the Irish Takeover Rules.

Valuer:

The Properties have been inspected and valued by a valuer who is qualified for the purposes of the Valuations in accordance with the RICS Red Book. We confirm that the personnel responsible for the Valuations are qualified for the purposes of the Valuations in accordance with the RICS Red Book, including to the extent required by the Irish Takeover Rules.

Inspections:

For the purposes of this Valuation Report, with the exception of 2 Burlington Road and 4-5 Harcourt Road (where we were instructed to externally inspect), we internally re-inspected the Properties on 1, 5 and 6 August 2019 as set out below in our Scope of Work detailed below.

 

With regard to those Properties which have not been subject to internal re-inspection, the Investment Manager acting on behalf of the Company has confirmed to us that they are not aware of any material changes to the physical attributes of the properties, or the nature of their location, since the last inspection. We have assumed this confirmation to be correct.

 

The Properties are subject to internal inspections on an annual basis with the last inspections having taken place in June/July 2018.

 

Assumptions:

The Properties' details, upon which the Valuations are based, are briefly described in the Schedule at Appendix 1.

 

The Valuations are in respect of each property considered individually. They exclude any additional value or reduction which might arise by the aggregation of the entire portfolio or of a group of properties for sale to one purchaser. No allowances have been made to reflect any premium which a purchaser of shares in the Company might pay for the opportunity of investing in an existing well balanced and diversified portfolio with the benefit of an established management structure.

 

We have made various assumptions as to tenure, letting, site and floor areas, taxation, town planning, and the condition and repair of buildings including ground and groundwater contamination - as set out below in the Scope of Work and the Sources of Information and the Valuation Assumptions.

 

In addition:

 

5 Harcourt Road: We are making an allowance for the outstanding capital expenditure due in respect of the construction project as advised the Company.   We have also been informed that 18 months' rent is being held by the Company in an escrow account, equating to approximately €4.6m. We have also been informed that this amount is attributed to 5 Harcourt Road and will be paid either to the tenant once they request reimbursement for their fit out works or to a potential purchaser in the event of a sale. We have therefore not made any allowance for this contingent liability in the Market Value reported herein

Title:  We have assumed that all the Properties benefit from 'good and marketable' title unless advised to the contrary.

Condition:  We have assumed that all the Properties are in a good condition in terms of structure and services unless we have been advised to the contrary or unless this would be apparent from a review of the CBRE reports provided to us or from a superficial viewing inspection. Any material issues we are aware of or which would be apparent from a review of any such reports are reflected in the Valuations.

 

Site and contamination/environmental issues: We have reviewed the CBRE environmental reports provided to us and any 'material' issues that we are aware of or which would be apparent from a review of these reports has been reflected in the Valuations.

 

We are not providing legal, tax, financial or other specialist advice.

 

If any of the information or assumptions upon which the valuations are based are subsequently found to be incorrect, the valuation figures may also be incorrect and should be reconsidered.

Variation from
Standard Assumptions:

None

Independence:

The total fees earned in 2018 by JLL from the Company were less than 10% of our total Irish income.

Previous Involvement and Conflicts of Interest:

JLL has provided ongoing valuation, agency and professional services to the Green Property group including Green Property Ventures (3) Limited, Green Property plc and Green Property Ventures Limited in respect of other properties under their management for the last 27 years.

 

We value the Properties on behalf of the Company on a six monthly basis for financial reporting purposes, the most recent valuation being 30 June 2019.

 

We have had the following involvement with the Properties:

 

Block A, Georges Quay Plaza, Dublin 2

·       Our Office Agency Department act on behalf of the Company for the lettings and rent reviews within the property.

 

Blocks E & F, Georges Quay, Dublin 2

·       Our Office Agency Department act on behalf of the Company for the lettings and rent reviews within the property.

 

Georges Court, Dublin 2

·       Our Office Agency Department act on behalf of the Company for the lettings and rent reviews within the property.

 

No. 2 Burlington Road, Dublin 4

·       Our Investment department provided advice to the previous owner.

·       Our Office Agency department acted on behalf of the previous landlord in the April 2007 rent review.

·       Our Office Agency department provided advice to the tenant in the past.

 

INM Media Printing Work, Site 2023, Citywest Business Campus,
Dublin 24

·   Our Investment department provided advice to the previous owner and acted on the sale of the property to the Company.

·   Our Office Agency Department acted on behalf of the Company in the 2015 rent review.

 

76-78 Harcourt Street, Dublin 2

·      Our Property Management Department currently manage the property.

 

4-5 Harcourt Road, Dublin 2

·      Our Property Management Department previously managed the property.

·      Our Office Agency Department act on behalf of the Company for the letting of vacant space within the property.

 

We do not consider that the above involvement represents a conflict of interest with respect to the Valuations and the Company has confirmed to us that it also considers this to be the case.

 

We confirm that neither the valuers named below, nor JLL, have any material connection to any party to the Proposed Transaction, other than the Company, which would cause us or them to cease to qualify as an "independent valuer" for the purposes of Rule 29.1(a) of the Irish Takeover Rules and we have undertaken in favour of the Company that we shall not take any action which would cause us or the relevant valuers to cease to qualify as an "independent valuer" for the purposes of Rule 29.1(a) for the duration of our engagement.

Disclosure:

The principal signatory, Pauline Daly has been signatory of valuations in respect of the Properties for the Company since 31 December 2013 and Conor Gillett since 31 December 2017. JLL are engaged on a rolling contract.

Market Value:

Having regard and subject to the foregoing and the Valuation Assumptions, we are of the opinion that the aggregate of the Market Values of each Property as at the Valuation Date of the assumed good and marketable freehold and long leasehold interests held in the Properties is as follows:  

 

€593,150,000

 

(Five Hundred and Ninety Three Million, One Hundred and Fifty Thousand Euros)

 

No allowance has been made for any expenses of realisation, or for taxation, (including VAT) which may arise in the event of a disposal and each Property has been considered free and clear of all mortgages or other charges which may be secured therein. We have estimated attributable acquisition costs at 8.46%.


We have valued the Properties individually and no account has been taken of any discount or premium that may be negotiated in the market if all or part of the portfolio was to be marketed simultaneously, either in lots or as a whole.

The Company has expressly instructed us not to disclose certain information which is considered commercially sensitive, namely the individual values of the properties.

For the avoidance of doubt, we have valued the Properties as real estate and the values reported above represent 100% of the market values of the assets. There are no negative values to report.

 

Our opinion of Market Value is based upon the Scope of Work, Sources of Information and Valuation Assumptions attached, and has been primarily derived using comparable recent market transactions on arm's length terms.

We have set out further details of the Properties at Appendix 1.

No Material Change since 30 June 2019:

We have also been asked to provide a confirmation that a current valuation, in this case at the date of the announcement pursuant to Rule 2.5 of the Irish Takeover Rules (the "Rule 2.5 Announcement"), would not be materially different from the valuation herein provided i.e. as at 30 June 2019.

 

We are aware that the Company initiated a sale process for the sale of the Company or its portfolio of assets on 15 April 2019. We understand that several parties made bids for the entire issued and to be issued share capital of the Company. We have not been made aware of the level of these bids.

We confirm that we have not been involved with the sales process for the Company nor the preferred bidder.  Furthermore, we have no information, nor have we been informed of the nature, number or level of bids made by any of the potential bidders for the 100% interest in the Company.

 

As confirmed, our Valuations are of the Properties and not of an interest in the Company.   Our Valuations are based upon the specific details of the Properties having regard to property market transactional evidence available as at the Valuation Date.

 

We hereby confirm that as at the date of our Valuation Report, we have not become aware (after having made due and careful enquiry of the Company) of any material changes to the Properties which would materially affect our Valuation between the effective date of the Valuation (30 June 2019) and the date of this Valuation Report.

 

We have not undertaken a formal revaluation of the assets at 13 August 2019. However, in relation to market conditions and movements in the property markets in which the Properties covered by our Valuation Report are located, based on observed transactions involving comparable properties which have occurred, and independent data published, since 30 June 2019, we do not consider that there has been any material change to the Valuation, in aggregate of the Properties.

 

Responsibility and Reliance:

 

Our Valuation Report is addressed jointly to the Addressees above for the Purpose only and third parties may not rely on it.

 

Our General Terms of Business and our General Principles Adopted in the Preparation of Valuations and Reports issued to the Addressee govern the provision of this Valuation Report.

 

Our Valuation Report may only be relied upon for the Purpose. No reliance may be placed on draft versions of the Valuation Report.

 

We are not acting as valuers of the Company itself; the valuation function for the Company and the setting of the net asset value of the Company remains with Green Property REIT Ventures DAC (the "Investment Manager"). Our role as valuer is limited to providing valuations of the Properties in accordance with the RICS Red Book and the terms set out in this report.

 

This report has been produced for the Purpose and may not be reproduced or used in connection with any other purposes without our prior consent.

 

This report is for the use only of the addresses for the Purpose and, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in accordance with the Valuation Report.

Publication:

We have given and not withdrawn our prior written consent to the publication of this Valuation Report in the Rule 2.5 Announcement in the form and context in which it appears.

 

Neither the whole of the Valuation Report, nor any part, nor reference thereto, may be published in document other than the Rule 2.5 Announcement without our prior written approval of the form and context in which it will appear. Our approval is not required if disclosure is required by law. We acknowledge that the Valuation Report (or parts thereof) will be made available for inspection and published on a website by the Company in accordance with the Irish Takeover Rules.

 

If at any stage it is intended to include any Valuation or report, or any reference thereto, in any Prospectus, Circular to shareholders or similar public document which does not constitute an Offer Document, our specific consent will be required. It would only be given following clarification of any additional liability. We may also, if appropriate, require the report to be revised to incorporate an adequate description of the terms of our engagement.

 

Without prejudice to the above, the Company may share copies of our Valuation Report and any reports prepared by us in connection with the Valuation Report with the Investment Manager and the Investment Manager's directors, officers, employees and professional advisers on a non-reliance and confidential basis. In addition, we agree that the Company may disclose copies of our Valuation Reports on a non-reliance basis to any bona fide third party which is considering making an offer for the Company as part of the Proposed Transaction, provided such third party executes a non-reliance letter in the form appended to our engagement letter dated 13 August 2019.

 

Yours faithfully

 

 

/s/ Conor Gillett

Conor Gillett MRICS MSCSI
Registered Valuer

Associate
For and on behalf of
Jones Lang LaSalle Limited

     

 

 

 

Scope of Work, Sources of Information & Valuation Assumptions 

Sources of Information:

 

 

 

We have inspected the Properties and carried out all the necessary enquiries with regard to rental and investment value, rateable value, planning issues and investment considerations. We have been provided with information by the Investment Manager, which we have relied upon for the purposes of the Valuations and assumed it to be correct.

 

Information provided includes, but is not limited to, the following information:

·    leasing information and Verified Tenancy Schedules, leases and reports;

·    floor area measurement surveys - CBRE Geomatics & 3D Services Reports, dated May/June 2019;

·    CBRE Building Survey Reports, dated June 2019;

·    details of irrecoverable revenue costs, void liabilities, revenue costs;

·    details of current negotiations in hand, including rent reviews, dilapidation claims, details of any CPOs, highway schemes, outstanding requirements under legislation or similar;

·    CBRE Phase 1 Environmental Assessment Reports, dated June 2019; and

·    capex/costs, timetables and specification details relating to properties in the course of refurbishment/development or to be refurbished/developed in the future.

We have made the further assumption that details of all matters relevant to the Valuations within their collective knowledge, such as prospective lettings, rent reviews, outstanding requirements under legislation and planning decisions, have been made available to us, and that such information is up to date.

 

In respect of Properties in the course of development or developments in progress, we have relied upon all plans, specifications and costings (including expenditure paid to-date and outstanding) provided by the Investment Manager acting on behalf of the Company.

 

We have taken account of rent reviews and changes in tenancies of which we have been advised by the Investment Manager acting on behalf of the Company.

 

Otherwise we have assumed that there have been no material changes, either physically or in terms of tenure or tenancies, affecting the remaining properties since our previous valuation.

The Properties:

Our report (in Appendix 1) contains a brief summary of the property details upon which our Valuations have been based, however, the Company has expressly instructed us not to disclose certain commercially sensitive information.

Inspections:

The Properties are subject to internal inspections on an annual basis with the last inspections taking place in June/July 2018.

 

For the purposes of this Valuation, with the exception of 2 Burlington Road and 4-5 Harcourt Road, where we were instructed to externally inspect, we internally re-inspected the Properties as set out below.

 

With regard to those Properties which have not been subject to internal re-inspection, the Investment Manager acting on behalf of the Company has confirmed to us that they are not aware of any material changes to the physical attributes of the Properties, or the nature of their location, since the last inspection. We have assumed this advice to be correct.

 

Property Address

Inspection Date

 

Block A, Georges Quay Plaza, Dublin 2

 

06/08/2019

Blocks E & F, Georges Quay, Dublin 2

06/08/2019

Georges Court, Dublin 2

06/08/2019

2 Burlington Road, Dublin 4*

06/08/2019

84-93 Lower Mount Street, Dublin 2

06/08/2019

76 - 78 Harcourt Street, Dublin 2

01/08/2019

4 - 5 Harcourt Road, Dublin 2*

01/08/2019

INM Media Printing Work, Citywest Business Campus, Dublin 24

05/08/2019

 

Site and Floor Areas:

We have not measured the Properties but, as instructed, for the purposes of the Valuations, we have relied upon the site and floor areas for each of the Properties as contained within the CBRE Geomatics & 3D Services Reports, dated May/June 2019, provided to us by the company which we have assumed to be correct and complete.

 

Where leases for the Properties contain floor areas for rent review purposes we have adopted these and relied upon the CBRE areas for reletting purposes at lease break or expiry.

 

The RICS property measurement (incorporating International Property Measurement Standards) 2nd Edition, January 2018, requires us to report International Property Measurement Standards (IPMS) measurements in our report for office properties. We were not instructed to measure the office properties and as IPMS areas are not available to us, as instructed, we will rely upon areas provided to us by the Investment Manager acting on behalf of the Company which we will assume are measured in accordance with the appropriate basis contained within the SCSI Measuring Practice Guidance Notes (Net Internal Area, Gross Internal Area or Gross External Area).

 

Environmental

Considerations:

 

We do not normally carry out investigations on site in order to determine the suitability of ground conditions and services for the purposes for which they are, or are intended to be put, nor do we undertake archaeological, ecological or environmental studies.

 

Unless expressly instructed we do not carry out site surveys or environmental assessments or investigate historical records to establish whether any land or premises are, or have been contaminated.

 

For the purposes of the Valuations, we have reviewed and relied upon the CBRE Phase 1 Environmental Assessment Reports, dated June 2019 for each of the Properties, provided to us by the Investment Manager acting on behalf of the Company which we have assumed to be correct and complete.

In the absence of any information or statement to the contrary within these reports, we have assumed that:

 

a)   the Properties are not contaminated and are not adversely affected by any existing or proposed environmental law;

 

b)   any processes which are carried out on the Properties which are regulated by environmental legislation are properly licensed by the appropriate authorities;

 

c)   the Properties possess current Building Energy Rating Certificates as required under the EC Energy Performance of Building Regulations 2006 (Statutory Instrument SI 666 of 2006) of Ireland;

 

d)   the properties are either not subject to flooding risk or, if they are, that sufficient flood defences are in place and that appropriate building insurance could be obtained at a cost that would not materially affect the capital value;

 

e)   invasive species such as Japanese Knotweed are not present on the Properties; and

 

f)   there are no abnormal ground conditions, nor archaeological remains, present which might adversely affect the current or future occupation, development or value of the Properties.

 

Repair and Condition:

 

We did not carry out structural surveys and therefore do not give any assurance that the Properties are free from defect.

 

For the purposes of the Valuations, we have reviewed and relied upon the CBRE Building Survey Reports, dated June 2019 for each of the Properties, provided to us by the Investment Manager acting on behalf of the Company which we have assumed to be correct and complete.

 

In the absence of any information or statement to the contrary within these reports, we have assumed that:

 

a)   there are no abnormal ground conditions, nor archaeological remains, present which might adversely affect the current or future occupation, development or value of the Properties;

 

b)   the Properties are free from rot, infestation, structural or latent defect;

 

c)   no currently known deleterious or hazardous materials or suspect techniques (including, by way of example, high alumina cement concrete, woodwool as permanent shuttering, calcium chloride or asbestos) have been used in the construction of, or subsequent alterations or additions to, the Properties; and

 

d)   the services, and any associated controls or software, are in working order and free from defect.

 

We have otherwise had regard to the age and apparent general condition of the Properties. Comments made in the Property details in Appendix 1 do not purport to express an opinion about, or advise upon, the condition of uninspected parts and should not be taken as making an implied representation or statement about such parts.

 

Services:

We have assumed that all mains services are available to all of the properties including electricity, water and sewage connections. We were not instructed to test services.

 

Town Planning:

 

We have not undertaken planning enquiries and assume that the Properties:

a)    have been constructed in accordance with applicable planning permissions;

b)    comply with all relevant statutes including planning, building and fire regulations and that a fire risk assessment and emergency plan are in place; and

c)     are not adversely affected by town planning or road proposals.

 

Titles, Tenures and Lettings:

Details of title / tenure under which the Properties are held and of lettings to which they are subject are as supplied to us by the Investment Manager. We have not generally examined nor had access to all the deeds, leases or other documents relating thereto. Where information from deeds, leases or other documents is recorded in this report, it represents our understanding of the relevant documents. We should emphasise, however, that the interpretation of the documents of title (including relevant deeds, leases and planning consents) is the responsibility of your legal adviser.

 

We have read documents of title, leases and agreements, where they have been made available to us, in our capacity as chartered surveyors and no reliance should be placed on our interpretation of same without verification by your legal advisors.

 

We have considered each property as if free and clear of all mortgages and other charges that may be secured thereon.

 

Unless disclosed to us to the contrary, the Valuations are on the basis that the Properties are held freehold or equivalent long leasehold and possess good and marketable titles free from any unusual encumbrances, restrictions or obligations that would affect value. We have assumed all documentation required under the Building Control Act 2007 is available in respect of each property.

 

Unless disclosed to us to the contrary, the Valuations are on the basis that the Properties possess good and marketable titles free from any unusual encumbrances, restrictions or obligations that would affect value.

 

Unless otherwise informed, the Valuations have been prepared on the basis that all leases, with the exception of leases signed after 28 February 2010, contain upwards only rent review clauses.  In the event a legal opinion is obtained which confirms a material uncertainty in respect of any tenancy within the Company, we would have to review and possibly revise our opinions of value.

 

We understand that all rents are paid exclusive of rates, and that except where we have been advised, all leases are on full repairing and insuring terms, either specifically or by means of a service charge provision, which enables the Company to recover its total costs of outgoings.

 

Unless otherwise informed, the Valuations have been prepared on the basis that:

·    there are no tenant's improvements that will materially affect our opinion of the rent that would be obtained on review or renewal;

·    there are no user restrictions or other restrictive covenants in leases which would adversely affect value;

·    where appropriate, permission to assign the interest being valued herein would not be withheld by the landlord where required;

·    vacant possession can be given of all accommodation which is unlet or is let on a service occupancy; and

·    stamp duty will apply at the rate currently applicable.

 

Third Party Covenants:

We have not conducted credit enquiries on the financial status of any tenants. We have, however, reflected our general understanding of purchasers' likely perceptions of the financial status of tenants.

 

Where properties are valued with the benefit of lettings, it is assumed, unless informed otherwise, that the tenants are capable of meeting their obligations under the terms of the lease.

 

Capital Values:

The Valuations have been prepared on the basis of 'Market Value' as defined in the RICS Red Book.

 

'The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion.'

 

The valuation represents the figure that would appear in a hypothetical contract of sale at the valuation date. No allowance or adjustment has been made for any expenses of realisation, or for taxation (including VAT) which might arise in the event of a disposal and the Properties have been considered free and clear of all mortgages or other charges which may be secured thereon.

 

No account has been taken of any inter-company leases or arrangements, nor of any mortgages, debentures or other charges.

 

No account has been taken of the availability or otherwise of capital based Government or European Community grants.

Valuation Approach:

The income capitalisation method is based on capitalising the net income stream at an appropriate yield. In establishing the net income stream we have reflected the current rent (net rent) and our opinion of rent at review payable to lease expiry, at which point the valuer has assumed that each unit of occupation will be let at their opinion of Market Rent. We have made allowances for voids and rent-free periods, as well as non-recoverable costs where appropriate.

 

The comparable method is used to select the appropriate yield, which has been adjusted for the location of the building, specification, tenant credit quality, continued use probability, unexpired lease length, lease terms and lot size amongst other factors. Where there is a potential reversion to a different net rent a term and reversion method of valuation or hardcore method may be adopted rather than an initial yield basis. For example, on vacant accommodation or where a rent increase on review or reletting is anticipated.

VAT:

We have not been advised whether the Properties are elected for VAT. All rents and capital values stated in this report are exclusive of VAT.

Rental Values:

Rental values indicated in our report are those which have been adopted by us as appropriate in assessing the capital value and are not necessarily appropriate for other purposes, nor do they necessarily accord with the definition of Market Rent.

Where the current rent is greater than the ERV but the lease provides for upward only rent reviews then the ERV is deemed to be equal to the current rent until the break option date or lease expiry, whichever is the earlier.

Plant and Machinery
and Landlords Fit Out:

Landlord's plant and machinery and fixtures such as lifts, escalators, air conditioning, central heating and other normal service installations have been treated as an integral part of the building and are included within the Valuations.

Process plant and machinery, tenants' fixtures and specialist trade fittings have been excluded from the Valuations. All measurements, areas and ages quoted in our report are approximate.

 

No specialist tests have been carried out on any of the service systems and, for the purposes of the Valuations, we have assumed that all are in good working order and in compliance with any relevant statute or regulations.

 

 

 

Appendix 1

Schedule of the Properties

 

Schedule of The Properties as at 13 August 2019

Address

Building Size (sq ft)

           Title

Ownership

Comments

Block A, Georges Quay Plaza,

Dublin 2

150,303

Long Leasehold

100%

Modern 11 storey over basement multi-let 3rd generation office extending to 150,303 sq ft with 135 car parking spaces.

Multi let to various tenants with a WAULT of 6.94 years.

Blocks E & F, Georges Quay,

Dublin 2

104,623

Long Leasehold

100%

Modern 5 storey over basement multi-let 3rd generation office extending to 104,623 sq ft and 77 car parking spaces.

Let to Citizens Information Board, Fidelity Transaction Services Ltd and WeWork with a WAULT of 10.48 years.

Georges Court,

Dublin 2

99,223

Long Leasehold

100%

Modern 5 storey over basement multi-let 3rd generation office extending to 99,223 sq ft, including four residential units and 53 car parking spaces.

Let to Northern Trust Property and GAM Fund Management with a WAULT of 5.55 years.

No. 2 Burlington Road

Dublin 4

83,223

Freehold

100%

 

A modern 6 storey over basement 3rd generation office building (83,223 sq ft Net Internal Area)
let to Breezewalk Ltd on a 25 year lease from 14 April 2002 with a break option in year 15, which was not exercised by the tenant.

84-93 Lower Mount Street Dublin 2

49,569

Freehold/ equivalent Long Leasehold

100%

A 4 storey over basement 2nd generation office building (49,569 sq ft Net Internal Area) let to the OPW on a 35 year lease from 6 February 1981, which was extended until 2021.

76-78 Harcourt Street

Dublin 2

24,940

Freehold

100%

A 5 storey over basement 2nd generation office building (24,940 sq ft Net Internal Area)
let to the OPW on a 35 year lease from 15 January 1982.

5 Harcourt Road

Dublin 2 (1)

 

49,246

Freehold

100%

Construction completed in July 2018 on 49,246 sq ft 7 storey over basement office block with 14 car parking spaces.

Single let to WeWork on a 20 year lease from 1 July 2018 with no break options

18 months' rent held by Landlord in escrow account, equating to approximately €4.6m, to be paid to the tenant once the tenant requests for reimbursement for tenant fit out works

INM Media Printing Work
Site 2023
Citywest Business Campus
Dublin 24

70,764

Long Leasehold

100%

A purpose built printing press and ancillary space (70,764 sq ft Gross External Area) constructed by and let to Independent Newspapers (Ireland Limited) on a 200 lease from 23 August 1999 with an option to assign in the 25th year of the term and at the end of every subsequent 10th year thereafter.

The property is located on a site that extends to approximately 1.78 hectares (4.39 acres).

1)    Notes - No allowance made for the 18 months' rent allowance to be paid to the tenant equating to €4.6m which is held by the Company in an escrow account., to be paid to the tenant on request for reimbursement for their fit out works

 

 

Appendix 2

Definition of Market Value

 

 

Market Value

Definition and Interpretive Commentary reproduced from the RICS Valuation - Global Standards 2017, VPS 4 and IVS Framework

1.1          Market Value

1.1.1       The definition of market value as defined in IVS 104 paragraph 30.1 is:

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

1.1.2       Market value is a basis of value that is internationally recognised and has a long-established definition. It describes an exchange between parties that are unconnected and are operating freely in the marketplace and represents the figure that would appear in a hypothetical contract of sale, or equivalent legal document, at the valuation date, reflecting all those factors that would be taken into account in framing their bids by market participants at large and reflecting the highest and best use of the asset. The highest and best use of an asset is the use of an asset that maximises its productivity and that is possible, legally permissible and financially feasible - fuller treatment of this particular premise of value can be found at section 140 of IVS 104.

1.1.3       It ignores any price distortions caused by special value (an amount that reflects particular attributes of an asset that are only of value to a special purchaser) or marriage value. It represents the price that would most likely be achievable for an asset across a wide range of circumstances. Market rent applies similar criteria for estimating a recurring payment rather than a capital sum.

1.1.4       In applying market value, regard must also be had to the requirement that the valuation amount reflects the actual market state and circumstances as of the effective valuation date. The full conceptual framework for market value can be found at paragraph 30.2 of IVS 104.

1.1.5       Notwithstanding the disregard of special value, where the price offered by prospective buyers generally in the market would reflect an expectation of a change in the circumstances of the asset in the future, the impact of that expectation is reflected in market value. Examples of where the expectation of additional value being created or obtained in the future may have an impact on the market value include:

·          the prospect of development where there is no current permission for that development and

·          the prospect of marriage value arising from merger with another property or asset, or interests within the same property or asset, at a future date.

1.1.6       In some jurisdictions a basis of value described as 'highest and best use' is adopted and this may either be defined by statute or established by common practice in individual countries or states.

COPYRIGHT © Royal Institution of Chartered Surveyors (RICS) July 2017
 

IVS Framework

30.2        The definition of market value shall be applied in accordance with the following conceptual framework:

(a)           "the estimated amount"

refers to a price expressed in terms of money payable for the asset in an arm's length market transaction.  Market Value is the most probable price reasonably obtainable in the market on the valuation date in keeping with the market value definition. It is the best price reasonably obtainable by the seller and the most advantageous price reasonably obtainable by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, special considerations or concessions granted by anyone associated with the sale, or any element of value available only to a specific owner or purchaser;

(b)           "an asset or liability should exchange"

refers to the fact that the value of an asset or liability is an estimated amount rather than a predetermined amount or actual sale price. It is the price in a transaction that meets all the elements of the Market Value definition at the valuation date;

(c)           "on the valuation date"

requires that the value is time-specific as of a given date. Because markets and market conditions may change, the estimated value may be incorrect or inappropriate at another time. The valuation amount will reflect the market state and circumstances as at the valuation date, not those at any other date;

(d)           "between a willing buyer"

refers to one who is motivated, but not compelled to buy. This buyer is neither over eager nor determined to buy at any price. This buyer is also one who purchases in accordance with the realities of the current market and with current market expectations, rather than in relation to an imaginary or hypothetical market that cannot be demonstrated or anticipated to exist. The assumed buyer would not pay a higher price than the market requires. The present owner is included among those who constitute "the market";

(e)           "and a willing seller"

is neither an over eager nor a forced seller prepared to sell at any price, nor one prepared to hold out for a price not considered reasonable in the current market. The willing seller is motivated to sell the asset at market terms for the best price attainable in the open market after proper marketing, whatever that price may be. The factual circumstances of the actual owner are not a part of this consideration because the willing seller is a hypothetical owner;

(f)            "in an arm's length transaction"

is one between parties who do not have a particular or special relationship, eg parent and subsidiary companies or landlord and tenant that may make the price level uncharacteristic of the market or inflated. The Market Value transaction is presumed to be between unrelated parties, each acting independently;

(g)           "after proper marketing"

means that the asset has been exposed to the market in the most appropriate manner to effect its disposal at the best price reasonably obtainable in accordance with the Market Value definition. The method of sale is deemed to be that most appropriate to obtain the best price in the market to which the seller has access. The length of exposure time is not a fixed period but will vary according to the type of asset and market conditions. The only criterion is that there must have been sufficient time to allow the asset to be brought to the attention of an adequate number of market participants . The exposure period occurs prior to the valuation date;

(h)           "where the parties had each acted knowledgeably, prudently"

presumes that both the willing buyer and the willing seller are reasonably informed about the nature and characteristics of the asset , its actual and potential uses, and the state of the market as of the valuation date. Each is further presumed to use that knowledge prudently to seek the price that is most favourable for their respective positions in the transaction. Prudence is assessed by referring to the state of the market at the valuation date, not with benefit of hindsight at some later date. For example, it is not necessarily imprudent for a seller to sell assets in a market with falling prices at a price that is lower than previous market levels. In such cases, as is true for other exchanges in markets with changing prices, the prudent buyer or seller will act in accordance with the best market information available at the time;

(i)            "and without compulsion" 

establishes that each party is motivated to undertake the transaction, but neither is forced or unduly coerced to complete it.

30.3        The concept of Market Value presumes a price negotiated in an open and competitive market where the participants are acting freely. The market for an asset could be an international market or a local market. The market could consist of numerous buyers and sellers, or could be one characterised by a limited number of market participants. The market in which the asset is presumed exposed for sale is the one in which the asset notionally being exchanged is normally exchanged.

30.4        The Market Value of an asset will reflect its highest and best use. The highest and best use is the use of an asset that maximises its potential and that is possible, legally permissible and financially feasible. The highest and best use may be for continuation of an asset's existing use or for some alternative use. This is determined by the use that a market participant would have in mind for the asset when formulating the price that it would be willing to bid.

30.5        The nature and source of the valuation inputs must be consistent with the basis of value, which in turn must have regard to the valuation purpose. For example, various approaches and methods may be used to arrive at an opinion of value providing they use market-derived data. The market approach will, by definition, use market-derived inputs. To indicate Market Value, the income approach should be applied, using inputs and assumptions that would be adopted by participants. To indicate Market Value using the cost approach, the cost of an asset of equal utility and the appropriate depreciation should be determined by analysis of market-based costs and depreciation.

30.6        The data available and the circumstances relating to the market for the asset being valued must determine which valuation method or methods are most relevant and appropriate. If based on appropriately analysed market-derived data, each approach or method used should provide an indication of Market Value.

30.7        Market Value does not reflect attributes of an asset that are of value to a specific owner or purchaser that are not available to other buyers in the market. Such advantages may relate to the physical, geographic, economic or legal characteristics of an asset. Market Value requires the disregard of any such element of value because, at any given date, it is only assumed that there is a willing buyer, not a particular willing buyer.

1.2          Special Value

Special value is an amount that reflects particular attributes of an asset that are only of value to a special purchaser.  A special purchaser is a particular buyer for whom a particular asset has special value because of advantages arising from its ownership that would not be available to other buyers in a market.

COPYRIGHT © Royal Institution of Chartered Surveyors (RICS) July 2017

 

 


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