A highly active year drove strong earnings growth and profitability for property investment company Hibernia Reit.
Over the 12 months to the end of March, Hibernia invested €445m in expanding its portfolio of properties in Dublin city centre.
A further €43m has been committed for further expansion while the value of the portfolio rose almost 20% in the same period. It recorded profits of €3.9m.
Some €12m of non-core assets arising from the Dorville non-core assets acquired in February last year have been sold for €16m while a further €18m worth is due to be sold by the end of the year.
“At year-end the company’s portfolio comprised 18 Dublin properties and was valued at €636m,” said Hibernia Reit chairman Danny Kitchen.
“The investment manager’s commitment to uncovering opportunities away from public sales processes and in the property loan market, where there has been less competition, has been a significant contributor to the 19.5% uplift in the value of properties.”
Since its flotation in December 2013, Hibernia has completed €571m worth of investments in commercial and residential property in Dublin, with the majority of deals completed off market.
Three-quarters of properties are central business district properties, while 13% are office development sites in the same area. The remainder is accounted for by residential (10%) and logistics (2%).
Hibernia’s central business district office portfolio is delivering average rents of €34.5 per sq ft — significantly less than below current prime rents of €47.5 per sq ft.
With an average lease term of 2.8 years, however, analysts are forecasting rental agreements to revert to market levels in the medium term, providing further potential to net income and net asset value.
Net asset value per share climbed 7% since the last set of half-yearly results in November for a total 16% annual increase.
Further activity is expected over the rest of the year. Hibernia tapped the market for €286m of new equity in a capital-raising episode last November, with €149m in cash available for acquisitions.
Once its credit facilities are accounted for, Hibernia has €300m of firepower.
Its Wyckham Point residential development is ahead of schedule and on budget with a finish date of September this year.
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