Ireland's largest office landlord Hibernia Reit restates faith in city centres on Covid-19 vaccine news                 

Chief executive Kevin Nowlan says Hibernia Reit remain "big believers" in city centres. "Our view is that when people are able to go back to offices they are going to go back in volume, and that the office in the future is going to be at the core of business."

The CEO of Hibernia Reit, the market-listed property firm that is one of Ireland’s largest office landlords, said the demise of city centre locations has been exaggerated and that the potential breakthroughs in Covid-19 vaccines could change the conversation about working from home in the near future. 

Chief executive Kevin Nowlan said the pandemic had accelerated trends for companies allowing their staff to work from home, while the vaccine trial news from Pfizer-BioNtech and Moderna will help companies start planning for office space after Covid. 

However, the property firm reported a net loss of €34.2m in the six months to the end of September compared with a profit of €25.5m a year earlier, even though its roster of top 10 clients paying rent in its Dublin offices includes tech giants such as Twitter, as well as Government agencies like the OPW. Twitter pays €5.1m in contracted rent and the OPW pays €6m to Hibernia.    

Even before the onset of the Covid crisis, like other Irish property firms, shares of Hibernia Reit were hit hard. Further weighed by the pandemic, its shares have fallen from 148 cent at the end of last year to 126 cent, for a stock market value of around €850m.   

Mr Nowlan said the loss came as its valuation fell by around €55m. Some of its office space has not been released because of the limited demand for companies taking new space during the period of huge uncertainty and its portfolio valuation fell by 3.8% to €1.42bn at the end of September. The market assesses that rents have fallen between 4% to 6% for prime office locations in the capital, Mr Nowlan said, while its vacancy rate is around 7%, in line with the market. 

He said that Hibernia remained "big believers" in the city centres. "Our view is that when people are able to go back to offices they are going to go back in volume, and that the office in the future is going to be at the core of business," Mr Nowlan said. Companies are looking for "more sophisticated office offerings” and Hibernia was able to provide the space they require, he said.               

Asked whether the problems of Irish property firms predated Covid, Mr Nowlan said that Brexit would be resolved in the next few weeks and international investors unnerved by Ireland's experience of property market turbulence in the past were increasingly being reassured.