Hibernia 'well placed' to benefit from potential Brexit demand
Hibernia Reit is well placed to benefit from any possible influx of companies seeking to relocate from the UK to Dublin following the British electorate's decision to vote in favour of Brexit, according to its ceo, Kevin Nowlan.
Highlighting the potential uplift at the company's AGM in Dublin yesterday, Mr Nowlan said: "I think companies will look in a very focused area.
"It will definitely be [in the] CBD (Central Business District) and more than likely the docks [is] where they'll be looking."
Hibernia has a significant number of office buildings, both existing and under development within the capital's central business district, leaving it well placed to meet any demand that may come from London as Britain's relationship with the EU is redefined in the coming years.
But Mr Nowlan cautioned that it would be another three months before UK firms began to make decisions in relation to possible relocation. The Hibernia ceo also said he got the sense that any potential moves would be on a departmental, as opposed to corporate, level were they to occur.
"I do think the floor-by-floor lettings are probably what people will look for initially, and I think a lot of it will be about [EU] passporting and regulatory rights within the EU," he said.
Hibernia announced yesterday that it had let the remaining 30,200 sq ft of available space in One Dockland Central, in Dublin's North Docks, to the Commission for Communications Regulation (ComReg).
The State entity is responsible for the regulation of the electronic communications and postal sectors in Ireland.
ComReg joins HubSpot and Bank of New York Mellon as a tenant in the building, and will occupy the ground and second floors on a 20-year lease, with a tenant-only break option after 11 years.
It is set to pay initial rent of €1.6m per annum - an average of €50 per sq ft. Hibernia also revealed that Analytic Partners has taken up 5,200 sq ft in the Chancery Building in Dublin 2 on a 15-year lease with an initial rent of €200,000 - an average of €37 per sq ft.
The company didn't indicate if any tenant incentives had been given. Hibernia had net debt of €115m in cash, and undrawn credit facilities of €307m, at the end of June.
Asked if he believed the Irish market had reached saturation point in terms of Reit activity, Mr Nowlan said he believed the 'cash box' strategy pursued by Hibernia's rival, Green Reit, had largely been played out.
Referring to the challenge Hibernia had faced in terms of its own establishment, he said: "When we set about setting up Hibernia, you had a 'Catch 22'. If you didn't have the assets, you wouldn't set up the REIT, and if you didn't have the money, you couldn't get the assets.
"So in fairness to Green, the 'cash box' concept, a lot of people said 'it can't be done'. They proved it wrong. We followed, got another one [REIT] away. I think that's the difficulty."
Hibernia Reit shares closed down 1pc at €1.374 each yesterday.