Inside Grosvenor Investment Division's First Irish Deal

Grosvenor Diversified Property Investments has made its debut in Ireland after investing €40M alongside Fine Grain Property in FGPO Ireland Fund III, a fund focused on workplaces in business parks across Ireland.

The new partnership follows GDPI’s recent announcement that it plans to double the size of the business over the next five years.

GDPI Chief Financial Officer Tim Budden talked through the rationale behind the first investment and the division's strategy for future investment.

The Fine Grain portfolio has been seeded by the 219K SF Waterside, a development of five HQ office buildings housing SAP, Fidelity, Glanbia and Hidden Hearing, located in the Citywest Business Campus in Dublin. Waterside also has planning permission for an additional three buildings, providing a further 180K SF, plus scope for future expansion.

Irish-owned investor Fine Grain Property has invested more than €290M across Ireland since 2016 and its business park portfolio consists of circa 1.2M SF of commercial real estate hosting more than 65 global employers across Ireland.

For GDPI, a specialist indirect investment arm established in 2012 as part of Grosvenor, the expansion strategy is based on looking for local expertise in new and existing markets.

And it is relationships rather than geographies that will drive the company’s growth strategy, Budden said.

“This is very much opportunity-led, based on a strong relationship with a very strong local partner. The quality and track record of the Fine Grain team, their ability to acquire and manage high-quality assets with blue chip multinational tenants, at discount to replacement cost, generating strong yields,” Budden told Bisnow.

“We're a small team and fundamental to our strategy is finding really good local partners who properly understand the dynamics of those markets,” he added.

GDPI Expansion Plans

In terms of future plans, Budden said that GDPI is looking to invest across a large range of markets and sectors.

“We currently don't have any exposure in Asia, for example, so as part of that expansion plan we would hope to invest in Asia in the reasonably near future. We've got a limited exposure in continental Europe. So again, we would hope to be doing a little bit more there. But that's not to say that we're not still pursuing opportunities in the markets where we are already established,” he said.

GDPI is also focused on sustainable investments and Fine Grain’s sustainability strategy was another reason for the company co-investing in the FGPO Ireland Fund III.

“It's very important to us. We've recently launched our responsible investment strategy, and that covers our desire to make sure that we deliver, along with our investments, strong societal benefits. And Fine Grain has really strong credentials and a proactive approach to sustainability,” Budden said.

Fine Grain Property Finance Director Kevin Mahony said that the partnership with GDPI and the establishment of FGPO Ireland Fund III represented “important steps” in the  growth of the business.

“Following our investment in the Waterside development in Citywest Business Campus, we continue to seek further properties to add to our portfolio,” he said.