27 Apr 5 Questions With…James McEvoy
In our new feature “5 Questions with…” we shine a spotlight on some of our team at Greenman as well as on some of our key external partners. We will asking them five questions about themselves, their work and the market to gain insights into the food retail real estate industry.
Take a moment to read the interview with James McEvoy, Greenman’s Head of Acquisitions, and learn more about what the future holds for the Greenman OPEN portfolio.
James, tell us more about yourself!
I am from the best place in Ireland, County Cavan! I have been living in Dublin for the last 15 years and work primarily from Greenman’s Dublin office. I am a big Liverpool FC supporter and enjoy the occasional trip to Anfield (COVID permitting). My key interests are travelling, all kinds of sports (I still play Irish Gaelic Football), skiing, Formula 1 and watching Netflix. I have been working for Greenman since January 2011, so I am part of the furniture now. However, I still enjoy every minute since that memorable first day in 122 Lower Baggot street, and being involved in getting Greenman to where it is today has been an amazing achievement for me. It has been a pleasure to be part of the journey so far with much more to come!
Working in the industry for so many years now, what do you still find interesting about working in German real estate acquisition?
There are numerous things that keep my job interesting every day. The German Real Estate market is so large it ensures that there are many good deals and opportunities every year – no deal is too small or too big for us so we’re always kept busy.
We get to deal and partner with some of Germany and Europe’s leading developers, retailers and agents. COVID-19 has forced us to be creative in terms of deal sourcing and executing with some of our major developers which has kept us on our toes.
We also get great satisfaction from deal sourcing, executing right through to final deal closing and handover. It’s even better if it’s a new build and you get to see it for the first time as a greenfield site and then as a final turn-key Centre.
And pre- and post-COVID-19, getting to travel and visit different parts of Germany where our potential Centres are located is always very interesting. I would love to know how many kilometres I have clocked up in my time with Greenman!
Looking ahead to 2021: What does the future hold for the portfolio of Greenman’s flagship fund Greenman OPEN? Or more directly, tell us where the money is going?
To continue driving our speciality investment strategy to acquire more and more food dominated retail Centres, with a more pronounced focus on essential retail which has been the winning retail asset class during COVID. However, the ultimate target is to get GMO to over a billion euro of AUM by the end of 2021 and continue to be Germany’s largest standalone food-retail fund. Eventually we aim to be Europe’s largest standalone food-retail fund, with an ambitious target to reach €3bn AUM by 2027. With the relationships and teams we have built on the ground over the past 15 years, our speciality in this asset class, our track record and overall market reach, we are very well placed to achieve these targets and most importantly continue to generate more and more long-term income for our investors.
Which factors do you consider most when looking for an asset for the GMO portfolio?
First and foremost we ascertain if the asset meets the fund’s investment guidelines. Visiting the properties is vital. It is extremely important to understand the physical asset, everything about it, the history, the condition, the tenants, to get a feel for the location, the people within the location, but in general, to know it’s the right fit for the GMO portfolio.
We do a lot of work in our underwriting on the location and demographics. It is key to understand the catchment areas of the locations and if they will be a sustainable location for that Centre and its tenants over the long-term.
We also consider the transaction security with the vendors, the- tenants and leases and how strong the tenant’s covenants are, the WARLT and what the non-refundable costs are.
Additionally important are the percentage of income generated by the food retail, essential and non-essential retailers and last but not least and for sure one of the most important factors, the return to the investor. As part of our due diligence, we create a 10-year business model for each acquisition, so pricing and the amount of debt the centre has play an important role here
How important do you feel building relationships with key retail real estate developers in Germany is to the success of OPENs growth?
This is extremely important and has taken time and a lot of effort to get to where we are now. I can safely say that we would most likely not be in the position we are in today without the on the ground relationships we have successfully built.
The OPEN portfolio is currently just under €900m of AUM and I would say c. 85% of this AUM was acquired through off-market deals via developers and tenant sale-and-leaseback deals. Greenman always look for transaction security and likewise, our partners want to deal with the specialists and natural buyers of their asset class. This has resulted in us being able to develop Framework Agreements which provide both the seller and the buyer a beneficial level of transaction security.
Our first two framework agreements in 2020, collectively secured the right for OPEN to acquire 10 new food anchored retail Centres enabling us to continue the fund’s growth plans. We want to continue with this approach in 2021 and hopefully secure and sign more of these framework agreements with other industry partners.
Thanks for your time James!