Hibernia REIT plc (“Hibernia” or the “Company”) announces it has agreed terms with FBD Holdings plc (“FBD”) for the early surrender of FBD’s leasehold interest in Guild House, IFSC, for a cash payment to Hibernia of €8.8m.
FBD holds a full repairing and insuring lease of all c. 73,000 sq ft of Guild House at an annual rent of €2.9m. This lease expires at the end of March 2025, with a break option at the end of March 2017. FBD is not in occupation and has sub-let the entire building to a number of sub-tenants. All the sub-leases expire by Q1 2017, other than that of BNY Mellon which occupies the first floor (c. 16,000 sq ft) on a lease running to March 2025.
The surrender payment of €8.8m includes a break penalty equal to one year’s rent, €2.4m to cover the expected shortfall between the rents Hibernia will receive from the sub-tenants to the date of the break option in March 2017 and what it would have received from FBD, and a sum for dilapidations. 50% of the surrender amount will be paid upon completion, which is expected to occur imminently, with the remaining 50% to be paid in two equal instalments on the first and second anniversaries of completion.
Kevin Nowlan, Chief Executive Officer, WK Nowlan REIT Management Limited, the Investment Manager, said:
“We are pleased to have reached agreement with FBD over the early surrender of their lease in Guild House. This is good business for Hibernia: with all the sub-tenants in occupation on sub-leases expiring by Q1 2017, other than BNY Mellon, this transaction enhances our options for the building and also for the adjoining Commerzbank House, which we are currently refurbishing.”