Hibernia Reit shareholder revolt dismissed as ‘nonsense’ by chairman
Property investment company targets sharp uplift in income as it readies rent reviews
Hibernia Reit chief executive Kevin Nowlan’s base salary increased 50 per cent to €450,000. Photograph: Tom Honan
A minor shareholder revolt at Hibernia Reit’s annual general meeting was dismissed as “nonsense” by the company’s chairman after substantial numbers objected to remuneration in the company and the re-election of a key board member.
At the agm held in the property investment company’s One Windmill Lane development, chairman Daniel Kitchen shrugged off the fact that almost 31 per cent of shareholders opposed the re-election of former Aer Lingus chair Colm Barrington, while more than 38 per cent of shareholders voted against the company’s remuneration report.
“Everyone’s entitled to their opinion, my opinion is it’s nonsense,” Mr Kitchen said after the meeting, commenting on advice from an influential investor advisory firm which claimed Mr Barrington held too many other positions to devote sufficient time to his role in the property group.
Asked whether the company would take on board the sentiment of shareholders on Mr Barrington’s position, Mr Kitchen said: “No, I’m not paying the slightest bit of attention to it, quite honestly. The reality is that these two proxy organisations have decided this is what their view on the world is and I personally don’t agree with it.”
Advisory groups Glass Lewis and Institutional Investor Service (ISS) opposed the company’s remuneration policy, which sees Mr Nowlan’s base salary increase 50 per cent to €450,000.
ISS said the rationale for the salary increases was “not considered to be sufficiently compelling”, while Glass Lewis said it had “severe reservations” about the proposal.
Speaking to journalists after the agm, Mr Nowlan said: “Their main issue was the level of hike, not actually the hike.”
The fact Mr Nowlan’s salary increased 50 per cent is “really a function of where he was rather than where is he”, Mr Kitchen added.
In advance of the meeting, the property investment company issued a trading statement, forecasting a sharp uptick in annual income as it readies a series of rent reviews.
Since March 31st, Hibernia has concluded one small rent review. This review was settled ahead of expectations, generating an uplift in rent of €400,000 a year (a 135 per cent increase). The investment company now has nine office rent reviews active, representing passing rent of €2.5 million a year, with an expected rental value for the 86,000sq ft of office space of €4.3 million, indicating a potential uplift of 72 per cent.
Hibernia also disclosed on Tuesday that during the month it had acquired 50 City Quay, a 4,500sq ft office building with river frontage in Dublin’s south docks, for €2.7 million.
Asked whether the company was considering a bid for the Project Waterfront development, which has just come on the market with a €120 million price tag, Mr Nowlan said the company would “look at all of the big opportunities that come up”.
Mr Nowlan added that he expected a lot of north docks, in Dublin, developed over the next number of years. In particular, he said sites such as the old Glass Bottle Company site needed to be developed for residential to meet some of the city’s demand. For every square foot of office space, four of residential were needed, he said, noting “that whole concept has been lost for the last 20 years”.
Hibernia had net debt of €205 million and cash and undrawn facilities of €195 million as of the end of June.