HIBERNIA REIT

Business Plus - - SHARES -

Re­mote work­ing and so­cial dis­tanc­ing stric­tures have led to much spec­u­la­tion about the fu­ture of the of­fice. Mod­ern floor space is among the most ex­pen­sive in Europe, which has been great for share­hold­ers in Hibernia Reit. The com­pany has an an­nual rent roll of €62m, and for the year to March 2020 share­hold­ers are be­ing paid €33m dividends, a 36% im­prove­ment on the pre­vi­ous year.

With the share at 109c re­cently, the 4.75c div­i­dend gives a pleas­ing yield of 4.4%. When the share was sold down to 76c in the March panic, the prospec­tive yield was 6.3%, which is why the price re­bounded quickly.

Hibernia Reit ended its fi­nan­cial year with €32m in cur­rent as­sets and €26m in cur­rent li­a­bil­i­ties. The com­pany had €28m cash and to­tal bor­row­ings of €260m, most of it long-term. As of March 31, Hibernia had net as­sets of €1,230m, while the mar­ket cap at 109c is €745m. Baked into the as­sets fig­ure is €430m of reval­u­a­tion gains over the past five years, jus­ti­fied at the time but sub­ject to down­ward re­vi­sion de­pend­ing on how the re­ces­sion pans out.

As for rental in­come go­ing for­ward, CEO Kevin Nowlan is san­guine. In the an­nual re­sults an­nounce­ment, he noted that the ten­ant base is weighted to­wards the tech­nol­ogy sec­tor and state en­ti­ties “We be­lieve the cur­rent cri­sis is un­der­lin­ing the im­por­tance of city cen­tre of­fices as places for em­ploy­ees to work to­gether and ex­change in­for­ma­tion and ideas,” he en­thused.

The com­pany trades as­sets too. Net sales pro­ceeds of €60m in FY19 funded a €25m share buy­back pro­gramme. Fur­ther trad­ing op­por­tu­ni­ties will arise, due to the spread be­tween sovereign bonds and prime yields, which should per­sist in the medium term as cen­tral banks drive down in­ter­est rates.

Kevin Nowlan, CEO of Hibernia Reit CONOR McCABE

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