Hibernia Reit set to bolster portfolio with €400m in borrowing

Hibernia Real Estate Investment Trust is likely to use the €400 million it is borrowing from three banks to add to its stock of central Dublin offices and to buy distressed property loans.

The Dublin-listed property investor yesterday said it had agreed a new €400 million credit facility with Bank of Ireland, Barclays and Ulster Bank to replace an existing €100 million loan due for repayment in August 2017.

Hibernia revealed details of the new loan after announcing pretax profits for the six months to the end of September – the first half of its financial year – more than doubled to €73.7 million from €32 million over the same period in 2014.

Speaking after the results were published yesterday, chief executive Kevin Nowlan said the company was likely to use the cash to buy further offices and sites in Dublin's central business district, which is already home to 83 per cent of its assets.

CBD offices

“I’d say it will be more of the same,” Mr Nowlan said. “Our focus is going to be on central-

business-district offices and maybe some sites. We may look at other debt books as well.”

Hibernia last year bought a property loan book from Ulster Bank that included Dundrum, Dublin apartment block Wyckham Point, which is now delivering the equivalent of €3.7 million in annual rent. Mr Nowlan said there were likely to be more opportunities in this area as the National Asset Management Agency continues to sell its property loans and the multinational private equity buyers that began moving on the market three years ago start to selldebts they acquired.

He also stressed there was continued demand for offices in central Dublin, where Hibernia is refurbishing or redeveloping a number of commercial blocks: “We think that there is three million square feet of demand in the market. At the moment, 2.5 million square feet is being built and 1.5 million of that is pre-leased. Those numbers are very healthy.”

Hibernia has just begun work on developments in Windmill Lane and a block on nearby Sir John Rogerson's Quay, which between them account for 180,000sq ft and will need €76 million in investment.

Mr Nowlan pointed out that a shortage of builders is a barrier to meeting growing demand for offices in the capital. “A lot of the constraints in the market are in construction,” he said, adding that the industry is about a quarter of the size it was when the property bubble burst eight years ago.

Twitter

Hibernia has agreed to let 85,000 sq ft in Cumberland House in Ballsbridge, Dublin, to Twitter for €4.6 million a year. It recently agreed terms for 27,500sq ft in One Dockland Central – formerly Commerzbank House in Dublin’s docks – to another technology company, Hubspot.

Hibernia’s net asset value per share rose 9.2 per cent over the six months to 122.1 cent. The company is declaring an interim dividend to 0.7 cent a share, more than twice the 0.3 cent it paid a year ago.