Property fund eyes up more Dublin acquisitions

Publicly-owned property fund Hibernia REIT has said it sees significant further commercial and residential acquisition opportunities in Dublin, having already spent nearly 90% of the equity it raised in its December float.

The company told shareholders at its AGM in Dublin’s Marker Hotel yesterday that, since the beginning of April, it has completed eight acquisitions, at a combined cost of €267m.

The Dublin-focused fund has spent €336m since its IPO and it will look to borrow an estimated €175m through a new lending facility to fund what it sees as continued investment opportunities.

“We continue to see a very high level of transaction volumes in the Dublin office market; within this we are finding attractive acquisitions that meet our selection criteria, particularly in the off-market and loan spaces,” Hibernia said via its latest trading update.

Around 45% of Hibernia’s purchasing activity is initially made via loan portfolios, with management defending this by saying that the goal is to always buy the underlying security.

REIT’s management also said, yesterday, it doesn’t sense any danger of an over-supply arising in the Dublin property market and it welcomed the acceleration of Nama’s disposal programme, as it will “increase the supply of available loan and property portfolios”.

Chief executive Kevin Nowlan said that as REITs are specialist in their nature, Hibernia will likely remain focused on the office and residential sectors in Dublin, though inroads to the industrial property market haven’t been ruled out. Hibernia’s portfolio — currently nearly three-quarters dominated by central Dublin offices (added to last week by two adjacent IFSC-based buildings) is 21% residential units, with the rest office development land and industrial units. It has a net initial yield of 4.1%, with management saying it believes the portfolio has “strong potential” for increases in rental rates in the future.