Property investment fund Hibernia REIT predicts strong growth

Publicly quoted property investment fund, Hibernia REIT has noted a strong start to 2015 and has said it sees there being a number of acquisition opportunities becoming available in the Dublin commercial property sphere over the next year and a half.

The company — one of the new breed of property investment funds to have floated on the Irish Stock Exchange in the last couple of years — yesterday published its latest trading update (basically covering the third quarter of its financial year plus the first month of this calendar year) during which it completed its €37.8m purchase of The Forum building in the IFSC, which was initially announced in August.

The other main aspect of the period was the fund’s successful completion of a second equity offer which raised net proceeds of €286m, as previously flagged.

As of the end of December, Hibernia had a cash balance of €233.5m, while its existing €100m revolving loan facility was undrawn.

Chief executive, Kevin Nowlan, said that the landscape for future transactions looks strong.

“The fourth quarter of 2014 saw a high level of transaction activity in the market, ahead of the ending of the capital gains tax relief for property on December 31. Much of this was at the sub-institutional scale or otherwise not of interest to us; 2015 has started positively, with a number of opportunities which we are actively assessing with our usual discipline.”

“With the proceeds of our capital raise and significant debt capacity, we are well-positioned to take advantage of the acquisition opportunities we expect in the next 12-to-18 months,” Mr Nowlan added.

It was that line which seemed to please analysts the most, yesterday.

“While the statement is light on transactions newsflow, we welcome the comment that opportunities continue to abound,” said Goodbody Stockbrokers analyst, Eamonn Hughes in a research note.

“We expect to see further transactions over the coming months and note recent commentary from CBRE which expects investment sales to match those in 2014.

In addition, Nama has indicated that it will be disposing of a further €8.2bn of smaller debtor loans in addition to the €4.5bn of larger loan sales already announced, which should provide ample opportunities for Hibernia to deploy its capital,” he added.