Hibernia buys more Dublin property and expects rents to continue to rise

Property investment company Hibernia REIT has acquired two buildings and a site near Dublin Castle for €16 million, and its fund is now 60 per cent invested.

In its full year results for the period August 13th to March 31st, the fund revealed that it has raised €385 million to date, of which €223m is now invested and committed in five acquisitions.

Kevin Nowlan, chief executive officer, WK Nowlan REIT Management, said that all of the company's acquisitions either have significant rental reversion to come or value-add / development angles. All but one of its acquisitions was concluded off-market, in a number of cases buying loans to secure an interest in properties it wouldn't otherwise have been able to. The company now employs 10 people and is shortly set to appoint a chief financial officer.

“Looking ahead, we expect continued growth in rents and capital values in our target markets. Given our contacts and knowledge of the Dublin market, we are confident in our ability to continue to find attractive investment opportunities,” Mr Nowlan said.

This morning it disclosed that it had acquired The Chancery Building, The Chancery Apartments and the adjoining Napper Tandy Site on Chancery Lane, Dublin 8 for € 16 m through a loan transaction.

The Chancery Building is a 33,799 sq. ft. office building comprising six stories over basement with 19 underground parking spaces. It is fully let to the Irish civil service, Wella UK and Gala Networks Europe with a rent roll of € 1.1m per annum equating to an average passing rent of € 30 per sq. ft. The price paid of € 16 m equates to a capital value of € 445 sq. ft. on the commercial element and a blended net initial yield of 6.8 per cent.

The Chancery Apartments consist of four 2-bed apartments in the same building accessed via a separate entrance onto Chancery Lane. They are let on 1 year leases producing a combined current annual rent of €63,360. At the price paid of €1.0m, the net initial yield is 6.1% based on gross income.

The Napper Tandy site is a small 0.05 acre corner site. It currently has planning consent for a c. 13,900 sq. ft. NIA office building or a 45 ‘suite’ student accommodation building.