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Hibernia enjoys a buoyant Dublin

Demand for prime office space in the Irish capital continues to outstrip supply
November 21, 2017

Dublin’s property market isn’t hot; it’s sizzling, as can be seen in half-year results from Hibernia Reit (HBRN). The property investor's net asset value (NAV) rose during the period at the sort of rate seen at the peak growth period in London. That gain reflected a valuation uplift of €61.6m (£54.6m), up from €24.3m a year earlier, while net rental income jumped by nearly a third to €21.9m.

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Just two weeks after the half-year end, stamp duty on commercial property transactions was increased from 2 per cent to 6 per cent, and had that been in effect during the first half, the portfolio valuation would have been €53.7m lower. But given the strength of demand for commercial space, 2017 is still expected to be a record year for office take-up. Notably, Hibernia has started to see some lettings because of the UK’s planned departure from the EU.

The 1 Windmill Lane site was completed, offering 124,000 sq ft of prime office space, as well as retail and residential space, and the office space is already 57 per cent let on leases averaging 19.2 years. Three more schemes will deliver around 247,000 sq ft of office space by the end of 2018, with nearly a quarter already pre-let. In addition, there are five schemes in the development pipeline covering around 660,000 sq ft of office space on completion.

HIBERNIA REIT (HBRN)   
ORD PRICE:144.5¢MARKET VALUE:€1bn
TOUCH:144.5-145.5¢12-MONTH HIGH:154¢LOW: 114¢
DIVIDEND YIELD:1.7%TRADING PROPERTIES:€0.39m
DISCOUNT TO NAV:7%NET DEBT:17% 
INVESTMENT PROPERTIES:€1.27bn  
Half-year to 30 SepNet asset value (¢)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
201613532.44.70.75
201715670.610.21.1
% change+16+118+117+47
Ex-div:4 Jan   
Payment:25 Jan