TIDMHBRN
RNS Number : 2777W
Hibernia REIT PLC
08 February 2017
Hibernia REIT plc Trading Update
8 February 2017
Hibernia REIT plc ("Hibernia") today issues a trading update
relating to the period from 1 October 2016 to date.
Highlights
-- Full ownership of 1 Windmill Lane ("1WML") acquired and
development due to complete ahead of schedule in mid-2017
-- Two Dockland Central and 1 Sir John Rogerson's Quay ("1SJRQ")
developments both remain on schedule: modest increase in
anticipated expenditure at 1SJRQ
-- New leases agreed at Harcourt Square and Two Dockland Central
-- In-place office portfolio vacancy rate now below 4% following
formation of flexible workspace partnership which is occupying
21,000 sq. ft. in Clanwilliam Court
Acquisitions
In December 2016 Hibernia acquired the 50% interest in 1WML held
by affiliates of Starwood Capital Group ("Starwood"), giving it
full control of the development scheme, where 122,000 sq. ft. of
offices, 7,000 sq. ft. of retail and 14 residential units are under
construction. Hibernia paid EUR27.5m and assumed Starwood's 50%
share of the EUR44.2m debt facility.
Developments and refurbishments
Progress at 1WML has been good and the project is running ahead
of schedule: the office building is now enclosed, fit-out has begun
and practical completion is expected in mid-2017 (previously late
2017). Discussions are on-going with a number of parties regarding
potential lettings.
Both Two Dockland Central and 1SJRQ remain on schedule for their
expected delivery dates in late 2017 and mid-2018, respectively. At
1SJRQ, worse than expected site-specific ground conditions together
with some design improvements mean total capital expenditure is
anticipated to increase by EUR2.5m to EUR57.5m, though this is
likely to be partly mitigated by an increase in gross development
value.
Planning permission has been received for a new office block of
50,000 sq. ft. at the front of Cumberland House ("Cumberland Phase
2") and preliminary planning approval has been granted at Hanover
Building to fully refurbish and extend the building by over 14,000
sq. ft. (a 30% increase in the office space).
Asset management
Hibernia agreed a new non-renewable six year lease with the
Office of Public Works ("OPW") at Harcourt Square, which commenced
on 1 January 2017. The rent was increased to EUR6.0m per annum
(previously EUR4.9m) and a one-off arrears payment of EUR0.5m was
received. The new lease gives both parties certainty regarding the
OPW's departure date and allows Hibernia to continue to refine its
plans for the property, which has planning permission for a
development of up to 276,500 sq. ft. of offices.
In January 2017 Hibernia formed a partnership with Iconic
Offices ("Iconic"), a leading Dublin-based flexible workspace
provider, for the establishment of a serviced office and co-working
business which will occupy 21,000 sq. ft. in Block 1 Clanwilliam
Court (acquired by Hibernia in June 2016) for five years. Hibernia
will receive the majority of net income from the occupier (after
amortisation of fit-out costs) up to a level equating to a EUR45
per sq. ft. headline rent. Iconic will receive the majority of any
net income above this level.
At Two Dockland Central, 16,000 sq. ft. of the 57,000 sq. ft.
under refurbishment has been pre-let to HubSpot on a 19 year lease
at an initial rent of EUR52.50 per sq. ft.. The tenant will receive
six months rent free from lease commencement (expected mid-2017).
HubSpot already occupies 27,500 sq. ft. of office accommodation in
the adjoining One Dockland Central.
Building management
Following its formation in July 2016, the building management
department now has seven of Hibernia's multi-let office buildings
under its direct management with the remaining multi-let buildings
expected to follow by mid-2017.
Balance sheet
At 31 December 2016 Hibernia had net debt of EUR148m and cash
and undrawn facilities of EUR296m, including 100% of the 1WML debt
facility.
Kevin Nowlan, Chief Executive Officer of Hibernia, said:
"The portfolio has performed well in the period thanks to our
asset management activity, with new leases signed at Harcourt
Square and Two Dockland Central, the formation of a flexible
workspace partnership with Iconic and planning permissions received
on two potential developments.
"We are particularly pleased with progress at Windmill Lane,
which we now own fully, where development work is ahead of schedule
and completion is now expected in mid-2017.
"With a strong balance sheet, a talented team and an exciting
pipeline of developments, we remain optimistic for the future."
ENDS
Contacts:
Hibernia REIT plc +353 1 536 9100
Kevin Nowlan, Chief Executive Officer
Tom Edwards-Moss, Chief Financial Officer
Murray Consultants
Doug Keatinge: +353 86 037 4163,
dkeatinge@murrayconsultants.ie
Jill Farrelly: +353 87 738 6608,
jfarrelly@murrayconsultants.ie
About Hibernia REIT plc
Hibernia REIT plc is an Irish Real Estate Investment Trust
("REIT") and is listed on the Irish and London Stock Exchanges. The
principal activity of Hibernia is to acquire and hold investments
in Irish property (primarily commercial property) with a view to
maximising shareholder returns.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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