Hibernia Reit’s investments yielding 4.1 per cent

Property investment company is seeking to raise additional debt

Wyckham Point apartments in Dundrum, Dublin, where Hibernia is completing 213 units. The property investment company said this morning that its portfolio is yielding 4.1 per cent. Photograph: Dara Mac Dónaill/The Irish Times

Wyckham Point apartments in Dundrum, Dublin, where Hibernia is completing 213 units. The property investment company said this morning that its portfolio is yielding 4.1 per cent. Photograph: Dara Mac Dónaill/The Irish Times

Tue, Jul 22, 2014, 08:06

Hibernia Reit’s property portfolio is yielding 4.1 per cent, the company said this morning, as it noted that it is seeking to raise additional debt.

Ahead of its agm today, Hibernia said that its property portfolio now comprises (by cost): 74 per cent central Dublin offices, 2 per cent central Dublin office development land, 21 per cent Dublin residential and 3 per cent Dublin industrial / logistics.

The portfolio has a net initial yield of 4.1 per cent (4.7 per cent post rent frees and abatements), and management said that the portfolio “has strong potential for increases in rental rates in future”.

The office space is over 99 per cent occupied on weighted average contracted rents of € 33psf., well below current estimated rental values for prime central Dublin offices of € 40-45psf., with rental values projected to rise further. In addition, Hibernia said it has “near term development opportunities” from the completion of the 213 residential units at Wyckham Point, and in the medium term, the Windmill Lane and Gateway sites.

In the period from April 1st to date, Hibernia said it has been “highly active”, completing eight acquisitions totalling € 267 million, primarily in the central Dublin office sector. These have come from both off-market and on-market purchases of both direct property and secured loans.

The company has raised some €336 million since its IPO in December 2013, with a further € 63m committed. In addition to this equity, Hibernia” continues to consider all available funding options”, including debt, equity and joint ventures . In the first instance the company said it is seeking to put in place debt on its existing equity base.

Kevin Nowlan, chief executive officer, WK Nowlan REIT Management Limited, the investment manager of Hibernia, said that it has now invested over 90 per cent of the funds raised at IPO.

“We continue to see a very high level of transaction volumes in the Dublin office market: within this we are finding attractive acquisitions that meet our selection criteria, particularly in the off-market and loan spaces. We welcome the recent statement by the Minister for Finance regarding the acceleration of the National Asset Management Agency’s disposal programme which we believe will further increase the supply of available loan and property portfolios”.