Concerns about a further commercial stamp duty hike by a potential Sinn Féin-led government continue to weigh on property shares, including Hibernia Reit, the country’s largest stock market-listed office landlord.
After issuing a trading update, Hibernia shares edged higher but have nonetheless shed around 10% of their value during the election campaign when it became clear Sinn Féin was surging in the polls.
Hibernia owns major swathes of office space in the Dublin docklands and central Dublin and is valued on the market at €876m, well below the value of the offices it owns. In the update, chief executive Kevin Nowlan said lettings in the Dublin office market ended the year “strongly” following a summer lull, and it had made progress in filling vacant office space.
Hibernia and other Irish property shares were hit last year by an unlikely combination of Brexit, as well as the decision by rival office landlord Green Reit, led by Pat Gunne and Stephen Vernon, to sell up. The property veterans, who had built up holdings in Dublin and Cork, said Green Reit shares were severely undervalued.
All sorts of Irish-exposed real estate shares, as well as the banks and residential landlord Ires Reit, have been hit in recent days amid investor concerns over Sinn Féin’s policies that may include a stamp duty hike and State-wide residential rent freezes.
Broker Davy said Hibernia shares trade at a 27% discount, “and far below levels seen in stocks exposed to the London office market”.
The broker noted Hibernia’s recent share buyback programme and the potential to do more of the same in the future.