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Saturday 20 September 2014

Hibernia in talks to borrow €175m for commercial property in Dublin

Published 23/07/2014 | 02:30

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Directors of Hibernia Reit Plc (from left) Stewart Harrington, Danny Kitchen (Chairman) and Colm Barrington, pictured at the Company's AGM in the Marker Hotel in Dublin

HIBERNIA REIT is in talks with banks about borrowing as much as €175m to spend on commercial property in Dublin.

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Speaking at the company's annual general meeting, company chief executive Kevin Nowlan confirmed that his firm had begun discussion with international and domestic lenders about increasing its war chest for offices and retail assets here.

Hibernia has raised €372m in equity so far. Legally, the company would be allowed to borrow up to that amount again. In practice though, market analysts expect the final figure to be in the region of €175m.

Mr Nowlan made clear he saw gearing up as the "next step" for his firm. "I wouldn't eliminate [another round of equity raising] in the future but debt is the next step for us," he said.

Mr Nowlan was largely unmoved by NAMA's decision to hold on to land in Dublin's south docks but poured cold water on the notion put forward by the finance minister, Michael Noonan, that it would become "Ireland's Canary Wharf". He pointed out that the regulations for development there provided for buildings of around six to eight storeys high - a far cry form the skyscrapers in the London development.

At the shareholder meeting, the company was questioned over the relatively low yield from its portfolio at present of just over 4pc. Mr Nowlan, however, dismissed those concerns, and said there was huge scope to increase rents across its portfolio as rent reviews came up.

"Prime Dublin rents are now above €40 per square foot but some of our tenants have leases at about €29 per square foot at present, so there is scope for revising rents across a number of our assets and then that yield figure will increase," he said.

Hibernia closed a deal to take on a site at Windmill Lane in the docklands last month. That site has planning permission for 120,000 sq ft and development will begin soon.

Shares in Hibernia closed down 0.9pc in Dublin at €1.10.

Irish Independent

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