Hibernia REIT plc (“Hibernia” or “the Company”) announces that it has exchanged contracts to acquire New Century House in Dublin’s International Financial Services Centre (IFSC). The property is a Grade A office building in a prime city centre location, subject to a long term tenancy agreement with Bank of Ireland Group.
The cost of the acquisition, which was sourced off market, will be €47 million. The acquisition will be financed from existing cash resources.
New Century House is a six storey over basement office building, comprising a net area of 80,000 sq. ft of office space. There is basement parking for 87 cars. Bank of lreland Group is to undertake upgrades and improvements which will further enhance the value of the building.
The property has the benefit of a full insuring and repairing lease with the Bank of Ireland Group. The lease term is until 2024 with an upward only rent review in 2019. The annual Headline Rent is €2.85m which resumes in full in October 2015, following the expiry of the current partial rent abatement period, from which point the building will generate a yield of approximately 5.93%. There is the potential for further growth from the rent review in 2019.
This is the second acquisition by Hibernia since listing in December 2013, and brings total funds invested to approximately €118m in a diverse portfolio of assets.
Kevin Nowlan, Chief Executive Officer, WK Nowlan REIT Management Limited, the Investment Manager, commented:
“We are delighted to have acquired another high quality asset. Our stated objective is to build a balanced portfolio of primarily Dublin based commercial assets, delivering excellent returns for shareholders. New Century House, our first entirely office acquisition, enjoys an excellent location, offers a strong rental income and has the potential to deliver growth in both rental income and asset value as the market continues to recover.. This is a prime building in a prime location with a long term lease agreement and a strong corporate tenant. New Century House is an excellent addition to the Hibernia REIT portfolio.”