Hibernia REIT PLC Trading Statement (2284W)
31 July 2018 - 4:00PM
UK Regulatory
TIDMHBRN
RNS Number : 2284W
Hibernia REIT PLC
31 July 2018
Hibernia REIT plc Trading Update
31 July 2018
Hibernia REIT plc ("Hibernia") issues a trading update relating
to the period from 1 April 2018 to date, ahead of its Annual
General Meeting being held at noon today.
Highlights
-- Sale of New Century House for EUR65.3m agreed and acquisition of 50 City Quay for EUR2.7m
-- 1 Sir John Rogerson's Quay ("1SJRQ") and 2 Windmill Lane
("2WML") developments both on track for 2018 completions,
Cumberland Place Phase II expected to complete in H1 2020
-- One rent review agreed, ahead of ERV, leading to a EUR0.4m increase in annual rent
-- Nine office rent reviews now active representing passing rent
of EUR2.5m per annum, with ERV of EUR4.3m per annum
Occupational market update
Dublin office letting activity in the quarter ended June 2018
maintained the strong momentum of recent quarters with 0.9m sq. ft.
taken up. Total lettings for the first half of 2018 exceeded 1.6m
sq. ft.: almost half of this came from transactions of 45,000 sq.
ft. or greater. Levels of active demand also remain high. Office
vacancy at the end of June 2018 was 4% for Grade A space in central
Dublin and 6% overall. Prime Grade A headline rents in the city
centre remain stable at in excess of EUR60 per sq. ft. (source:
Knight Frank).
Acquisitions and disposals
In July 2018 Hibernia exchanged contracts for the sale of New
Century House for EUR65.3m. The price, which was modestly ahead of
the March 2018 valuation, represents an ungeared IRR in excess of
12% on Hibernia's investment. The sale is expected to complete in
September 2018 and continues our recycling of capital into projects
with higher expected forward returns.
In July 2018 Hibernia acquired 50 City Quay, an office building
of 4,500 sq. ft. with river frontage in Dublin's South Docks, for
EUR2.7m. The property, which is vacant, is adjacent to 1SJRQ and
expands Hibernia's Windmill Quarter to six buildings with c.
400,000 sq. ft. of office accommodation, when complete, as well as
retail and leisure facilities.
Developments and refurbishments
The completion of 1SJRQ is now expected to occur in Q4 2018 and
refurbishment and extension of 2WML remains on track to complete in
Q4 2018: inspections and discussions with potential occupiers
continue. We expect work to commence on site at Cumberland Place
Phase II in September 2018 with completion scheduled for the first
half of 2020.
Asset management
The vacancy rate in our in-place office portfolio is c. 2%.
Since 31 March 2018 one rent review has been settled ahead of ERV,
generating an uplift in rent of EUR0.4m per annum (+135%). A
further nine rent reviews are due on 86,000 sq. ft. of office space
and EUR2.5m of annual rental income: the ERV for the space is
EUR4.3m.
Balance sheet
At 30 June 2018 Hibernia had net debt of EUR205m and cash and
undrawn facilities of EUR195m. Net of committed development spend,
the acquisitions and disposals described in this trading update and
payment of the final dividend, cash and undrawn facilities totalled
over EUR170m.
Kevin Nowlan, Chief Executive Officer of Hibernia, said:
"The strong demand from occupiers for Dublin office space has
continued, with over 1.6m sq. ft. of take-up in the first half of
2018, as has the trend towards larger-sized lettings. Our three
committed developments are progressing towards completion and are
well-timed to capitalise on the high levels of active demand in the
market and to drive increases in our rental income.
"We are also moving into a busy period of rent reviews which
will enable us to start capturing the reversionary potential within
our acquired in-place office portfolio, which is significantly
under-rented. Since 31 March 2018 we have concluded one small rent
review, ahead of its estimated rental value, and we now have nine
office rent reviews active, representing passing rent of EUR2.5m
per annum.
"With the agreed sale of New Century House and the acquisition
of 50 City Quay, we are continuing to recycle our capital into
opportunities where we expect greater future returns. Hibernia is
well positioned with an extensive longer-term development pipeline,
a robust balance sheet and an experienced management team."
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@murraygroup.ie
Jill Farrelly: +353 87 738 6608, jfarrelly@murraygroup.ie
About Hibernia REIT plc
Hibernia REIT plc is an Irish Real Estate Investment Trust
("REIT"), listed on Euronext Dublin and the London Stock Exchange.
Hibernia owns and develops property and specialises in Dublin city
centre offices.
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END
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