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Hibernia Reit’s €1.1bn takeover due to complete next week

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Kevin Nowlan, CEO of Hibernia Reit

Kevin Nowlan, CEO of Hibernia Reit

Kevin Nowlan, CEO of Hibernia Reit

The €1.1bn acquisition of Irish property investment firm Hibernia Reit by Brookfield Asset Management is slated to close next Wednesday following a High Court hearing to approve a scheme of arrangement that will give effect to the deal.

Brookfield swooped in March to buy Hibernia Reit, which was co-founded by its chief executive, Kevin Nowlan, and his father, Bill.

The deal struck by Brookfield represented a near 36pc premium to the closing price of Hibernia’s shares before it was announced.

The approach by Brookfield came as little surprise to analysts.

Davy Stockbrokers pointed out at the time that shares in the Irish group had traded at a discount to net tangible assets for six years.

Toronto-based Brookfield is one of the world’s largest owners and operators of real estate, with more than $250bn of property assets. Its chief executive is Bruce Flatt.

Hibernia is primarily involved in city centre office developments.

Its shareholders sanctioned the takeover by Brookfield last month.

Hibernia Reit will apply to the High Court next Wednesday for an order that will sanction a scheme of arrangement between Hibernia and its shareholders.

The sanctioned scheme will give effect to the acquisition by Brookfield.

In a February trading update, Hibernia Reit said that take-up in Dublin’s office market had continued to recover, led by technology and professional services firms.

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In March this year, Hibernia agreed to sell the Forum development in Dublin’s International Financial Services Centre for almost €31m to a company controlled by Spear Street Capital.

The price was in line with the carrying value of the asset at September last year.

The 47,000 sqft office block was constructed in 2003 and was vacant.

A report from BNP Paribas Real Estate last month noted that 45,600 sqm of office space was leased in the capital in the first quarter of 2022.

That represented a ten-fold improvement on a trough seen in the first three months of 2021, and the trend is improving, it added.

But it also pointed out that office space take-up remains “well down” on historical averages.

More than 100,000 sqm of new office space has already come onto the market in Dublin this year, with the total for 2022 likely to be around 240,000 sqm.

That will make 2022 the biggest year for office completions in Dublin since 2008, according to BNP Paribas.


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