Hibernia has further acquisitions in it’s sight

Yesterday Hibernia posted interim results for the six months to the end of September in which it noted an investment of €319m and also committed a further €78m in 12 Dublin-based property transactions; bringing the total invested and committed to €476m.

Total property income was €5.6m, which combined with revaluation gains drove total income of €34.5m with operating expenses leaving operating profit and pre-tax profit of €31.9m.

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Danny Kitchen, Chairman of Hibernia REIT said:

“The six month period to 30 September has been very active for Hibernia, with €397m invested and committed in connection with 12 transactions, one of which completed after the period end.  While the investment of the IPO proceeds has been rapid, the focus has been on investing wisely and it has been really encouraging to see the returns generated by the portfolio in a short hold period.

With €330m of cash and committed facilities in place and further debt capacity available, the Company is well positioned to take advantage of future investment opportunities.”

Kevin Nowlan, Chief Executive Officer, WK Nowlan REIT Management Ltd, said:

“I am delighted with our progress and in particular with the portfolio we have assembled, which is already delivering attractive returns and is rich in potential.  The successful completion of our €300m secondary equity offering earlier this month was a strong vote of confidence in our strategy and delivery to date.  The capital raised positions us well to take advantage of the significant pipeline of acquisition opportunities we expect in the next 12 to 18 months.”

Highly active but disciplined period of investment

·     €319m invested and €78m committed in Dublin property in the period, in 12 transactions

·     Since IPO a total of €476m invested and committed, fully deploying IPO net proceeds

·     87% of acquisitions[1]completed off-market and 44% through loan purchases1

Excellent financial performance in short period of asset ownership: maiden dividend declared

·     Basic and EPRA NAV per share of 104.7 cent, up 8.6% on March 2014, with net assets of €403m (March 2014: €371m)

·     Increase in NAV driven by 9.6% valuation uplift on purchase price (7.1% including acquisition costs) in weighted average hold period of 3.9 months

·     Net income of €31.9m, equating to basic and diluted EPS of 8.3 cent

·     Maiden dividend of €2.0m declared on the enlarged share capital (DPS of 0.3 cent)

High quality Dublin property portfolio with rental reversion potential and development opportunities

·     81% in CBD offices, 11% in residential, 6% in CBD office development sites and 2% in logistics

·     CBD office portfolio 99% occupied and has a current yield on cost of 5.5% (5.8% on contracted rents) off average rents of €34 psf, well below current prime rents of €40-45 psf

·     Substantial development opportunities elsewhere in the portfolio, including office developments at Windmill Lane and 1-6 Sir John Rogerson’s Quay

·     Commenced fit-out of 213 partially completed apartments at Block 3, Wyckham Point: on target to deliver first units for rent by Q2 2015 and full completion by end of 2015

·     Portfolio EPRA net initial yield 4.8%

Investment Manager Team expanded

·     Core team in place with permanent headcount up to 13

·     CFO recruited in June 2014

·     Support where required from wider WK Nowlan team of 26 staff

Funding in place to take advantage of investment opportunities

·     Secondary equity offering completed on 4 November 2014 raising gross proceeds of €300m

·     €100 million three year revolving credit facility agreed with Bank of Ireland in August 2014

·     Current cash and committed facilities of €330m and further incremental firepower of c.€360m if leveraging current equity base to 40% LTV[2]

Positive outlook for 2015

·     Improving Irish economy (GDP growth in 2014 forecast to be 4.7%) and continuing foreign direct investment flows into Ireland supportive of sustained recovery in property market

·     Management team seeing continued strong occupational demand driving rental growth and a substantial pipeline of investment opportunities