Value of Hibernia Reit property portfolio jumps 10% in four months

Property company reports net income of €319m in the six months to end of September

 Colm Barrington, non-executive director, Hibernia Reir, Daniel Kitchen, chairman, and Terence O’Rourke,  non-executive director

Colm Barrington, non-executive director, Hibernia Reir, Daniel Kitchen, chairman, and Terence O’Rourke, non-executive director

 

The value of Hibernia Reit’s property portfolio, which comprises mainly central Dublin office space, has jumped 10 per cent in four months, the company’s investment manager Kevin Nowlan said yesterday.

He said strong economic growth and a continuing flow of foreign direct investment were supporting a “sustained recovery” in the Irish property market.

Mr Nowlan said the grade A vacancy rate for office space in Dublin’s prime areas had fallen to below 2 per cent, suggesting demand was still outstripping supply by some margin.

He was speaking as the three Dublin-listed property reits, Hibernia, Ires and Green, published updates on their operations yesterday.

In its half-year results, Hibernia Reit reported net income of €31.9 million, which equates to basic and diluted earnings per share of 8.3 cent for the six-month period.

The company’s portfolio, which includes Guild House and Commerzbank House in Dublin’s IFSC, was yielding about 4.8 per cent but this was expected to rise about 5.5 per cent once its Wyckham Point apartments in Dundrum were fitted out and leased.

Since its stock market launch in December 2013, the company has invested a total of €476 million, including its €375 million IPO proceeds.

Some 87 per cent of acquisitions were completed in off-market transactions and 44 per cent through loan purchases.

Mr Nowlan said its office space was more than 99 per cent occupied on weighted average contracted rents of about €34 per square foot.

However, he said the market has moved on significantly since then and “we envisage we are going to get significant increases in our rental income when we rent review over the next three years.”

In a statement accompanying the results, Hibernia’s chairman, Danny Kitchen, said that with €330 million of cash and committed facilities in place and further debt capacity available, the company is well positioned to take advantage of future investment opportunities.

Separately, Irish Residential Properties Reit (Ires Reit), which floated on the Irish Stock Exchange in April, said its portfolio was yielding 5.2 per cent on total investments of €317 million.

In an interim management statement, the property company revealed that it acquired 847 units during the period for a total consideration of approximately €261.8 million at a gross yield of approximately 5.2 per cent.

This increases the company’s total investment since incorporation to date to € 317 million. These investments have been funded by way of equity of €192 million and debt of €125 million.

“ We have now invested approximately € 317 million in investment properties. With the initial capital raised now deployed and leveraged, we continue to assess our funding options for growth, including further debt, joint ventures and equity funding and will update the market as and when appropriate,” David Ehrlich, the company’s chief executive, said.

Meanwhile, Green Reit is producing a portfolio income yield of 6.8 per cent on its €774 million portfolio, the company reported yesterday.

To date, Green has total capital invested of €774 million in 24 properties, with a portfolio value of €813 million.

With 92 per cent occupancy, this portfolio produces a gross rent roll of €52.9 million, an investment income yield of 7.1 per cent and a portfolio income yield of 6.8 per cent.