Fund sizes up Garda HQ

Hibernia REIT is to lodge a planning application that could see the Garda regional headquarters, on Dublin’s Harcourt Square, replaced by up to 300,000sq ft of prime office development.

The publicly-quoted property investment fund yesterday announced the €70m ‘off-market’ purchase of the 1.9 acre site, which is currently let to the Office of Public Works and is used as the Dublin regional headquarters of the Garda Siochána, covering 116,848sq ft of office space.

The deal is Hibernia’s second largest and 14th since its initial public offering at the end of 2013. The company will have invested €506m (with a further €43m committed) upon completion of this deal.

Harcourt Square formed part of Nama’s ‘Project Aspen’ portfolio sale to a consortium led by US private investment company, Starwood Capital two years ago. It is understood that Hibernia is buying it from a vehicle controlled by Starwood. It marks the second Starwood asset bought by Hibernia, the first being the Windmill Lane site in Dublin.

Hibernia is viewing the Harcourt deal as a means of good immediate rental income. The building is generating rental income of €4.9m per year and has significant redevelopment potential in the longer-term. The site has potential for redevelopment at significantly increased density.

Hibernia’s chief executive Kevin Nowlan said that the acquisition gives the company substantial near-term income and exciting redevelopment opportunities in the traditional office core of Dublin.

“We expect to submit a planning application shortly and look forward to working closely with Dublin City Council to deliver attractive new grade A office space in the city centre in future.”

“This is an attractive deal for Hibernia, providing a good income yield in an excellent location and significant potential for further development.

“We would expect development to begin on a new site in the medium term, with development likely to take around two years,” said Eamonn Hughes of Goodbody Stockbrokers.

“We estimate the site could cater for a development of around 250,000 to 300,000 sq ft,” he added.

In a trading update, Hibernia said, last week, it sees a number of acquisition opportunities in the Dublin commercial property sphere over the next year and a half.

Investec yesterday called the Harcourt acquisition “another tidy deal” for the REIT.