Hibernia Reit in strong position but coronavirus impact unknown

Hibernia Reit said it had made a deal with technology company 3M to let space in its 2 Cumberland Place development, but warned it was too early to tell the impact of the coronavirus pandemic on the company’s business.

In a trading update to the market ahead of its annual results next month, Hibernia Reit said it had substantial cash and low leverage, putting it in a strong position.

Hibernia said it had cash of €21 million and undrawn facilities of €133 million at March 31st 2020.

The group said it secured three new office lettings in the final months of the financial year, bringing its annual contracted rent to more than €66 million. The bulk of that – approximately 90 per cent – comes from office properties, with residential properties making up the bulk of the rest of it. The largest of the new lettings was the remaining 47,500 sq ft in 2WML to online fashion platform Zalando.

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Since the end of the financial year, the group has pre-let three floors in its 2 Cumberland Place building, with 3M subsidiary 3M Digital Science Community taking up 24,000 sq ft in the building. The 10-year lease will have an option option to extend for a further five years. Hibernia said 3M would pay a net effective rent ahead of the September 2019 net estimated rental values.

Hibernia's chief executive Kevin Nowlan said the company's priority was to ensure the safety of staff, tenants and suppliers.

“It is too early to have full visibility of the impact of Covid-19 but the group is in a strong position with low leverage, substantial cash and undrawn facilities, and a diverse range of tenants, many of which are on long leases,” he said. “While we expect activity in occupational markets to slow until the current crisis abates, some lease negotiations are continuing and we are delighted to have pre-let three floors in 2 Cumberland Place to 3M.”

Head office staff are currently working from home, with Hibernia’s managed buildings open and accessible by tenant employees.