Hibernia REIT has exchanged contracts to acquire New Century House in Dublin’s International Financial Services Centre for €47m.
The property is a 80,000 sq ft grade A office building in a prime city centre location, subject to a long-term tenancy agreement with Bank of Ireland Group.
The off-market deal will be financed from existing cash resources.
Hibernia, Ireland’s newest REIT, said Bank of Ireland Group planned to undertake upgrades and improvements “which will further enhance the value of the six-storey building”.
The property has a full insuring and repairing lease with the group 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 around 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 around €118m in a diverse portfolio of assets.
Kevin Nowlan, chief executive, WK Nowlan REIT Management, the investment manager, said: “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.”
bridget.oconnell@estatesgazette.com
