Hibernia REIT acquires IFSC building for €47 million

Property investment group Hibernia REIT is to acquire New Century House in Dublin's International Financial Services Centre (IFSC) for €47 million.

The acquisition of the Grade A office building, which was sourced off market, will be financed from existing cash resources.

New Century House is a six storey over basement office building on Mayor Street, comprising a net area of 80,000 sq. ft of office space. There is also basement parking for 87 cars.

The property was developed in 1999 by Christopher Bennett and initially acquired by an investment syndicate headed by Derek Quinlan.

New Century House was bought last year for about €28 million, but has now been sold on following a lease renegotiation with the existing tenants, Bank of Ireland Group.

Full rent on the property is to resume in Ocotber 2015, following the expiry of the current partial rent abatement period. The renewed lease will run until 2024 with an upward only rent review in 2019.

The annual headline rent will be €2.8 5 million following resumption of full rental charges at which point the building will generate a yield of 5.93 per cent.

This is the second acquisition by Hibernia since listing in December 2013, and brings total funds invested to approximately €118million.

Last month the group announced the acquisition of a portfolio of residential real estate loans fom Ulster Bank for €67 million. The porfolio of assets, which were held by RBS Capital Resolution, included 213 partly completed residential units at Wyckham Point, Dundrum, Dublin 16.

“We are delighted to have acquired another high quality asset. Our stated objective is to build a balanced portfolio of primarily Dublin based commercial assets, delivering excellent returns for shareholders,” said Kevin Nolan, chief executive with the investment vehicle.

“New Century House, our first entirely office acquisition, enjoys an excellent location, offers a strong rental income and has the potential to deliver growth in both rental income and asset value as the market continues to recover. This is a prime building in a prime location with a long term lease agreement and a strong corporate tenant. New Century House is an excellent addition to the Hibernia REIT portfolio,” he added.