Hibernia REIT plc (“Hibernia”) announces that it has exchanged contacts to sell New Century House to a fund managed by Credit Suisse Asset Management Global Real Estate for €65.3m. The price is modestly ahead of the March 2018 book value and reflects a net initial yield of 4.0% and a capital value of €815 per sq ft for the office accommodation. Completion is expected to occur in September 2018.
The property is situated on Mayor Street in Dublin’s IFSC and comprises 80,000 sq ft of offices with further basement storage areas and parking. It is fully let to Bank of Ireland, producing rental income of €2.9m per annum (c. €31.50 per sq ft for the office space), with 0.6 years to rent review and 5.6 years to lease expiry.
Hibernia purchased New Century House in March 2014 for €47m, the price representing a capital value of €585 per sq ft for the office accommodation and a net initial yield of 3.9%, rising to 5.9% following the expiry of a rent abatement in October 2015. The sale price gives Hibernia an ungeared IRR on the investment in excess of 12%.
Richard Ball, Chief Investment Officer of Hibernia, said:
“New Century House was Hibernia’s first office acquisition following our initial public offering in late 2013. Since then the building has increased in value substantially, helped by the strong recovery in the Irish property market and by demand for prime office assets in Dublin’s city centre. The sale continues our recycling of capital into new projects.”
ENDS