Value of Hibernia Reit’s portfolio eclipses €1bn

The value of Hibernia Reit’s property portfolio, which comprises mainly central Dublin office space, has eclipsed €1 billion for the first time.

The property company also said it was optimistic that Dublin’s commercial market would benefit from the UK’s decision to leave the EU.

In half-year results published on Thursday it reported a pre-tax profit of €32.4 million, which was down significantly on the €73.7 million recorded for the same period last year.

Chief executive Kevin Nowlan told The Irish Times the fall-off in profit related to the re-evaluation of properties amid shrinking capital growth values.

The company said its contracted rent roll was now €46.2 million, up 18.5 per cent on March. This follows major lettings to ComReg and MTT and the acquisition of three office blocks on the corner of Mount Street Lower and Clanwilliam Place in Dublin’s central business for €51 million in June.

Along with the acquisition of Marine House earlier in the year, Hibernia now owns four contiguous blocks of the seven that comprise Clanwilliam Court .

The company declared an interim dividend of 0.75 cent per share, representing 50 per cent of dividends paid in respect of the prior year, in line with previous guidance.

Hibernia’s debt stood at €110.5 million as of the end of September, corresponding to a loan-to-value ratio of 10.7 per cent.

Mr Nowland noted the company had roughly €300 million in the locker for further acquisitions and had several possibilities in the pipeline.

He said the oucome of the current Brexit dyanamic was impossible to predict but he said the company had witnessed an “uptick” in enquiries about commercial space in Dublin in the last six to eight weeks.

“While it is still early days we are optimistic regarding the Dublin office market’s prospects to benefit from the UK’s decision to leave the EU, although we recognise that the timing and terms remain unclear and there are risks to the wider Irish economy,” he added.

Mr Nowlan, however, acknowledged the current housing shortages represented the single greatest impediment to the capital’s post-Brexit potential.

Tax changes “We are also monitoring closely the impact of the recent property tax changes proposed in the Finance Bill: while these do not affect Reits directly they may create uncertainty in the investment market in the near term as well as possible opportunities if some parties choose to exit the market

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“As the rate of growth of rents and capital values moderates, development activity and asset management will be increasingly important to delivering performance.

“With Hibernia owning a portfolio rich in opportunity with a number of committed developments due to complete in the next 20 months and significant firepower to take advantage of any opportunities that arise, we remain positive about our prospects,” said Mr Nowlan.