Commercial landlord Hibernia REIT has said it has collected nearly all rents for the the current quarter as the property market continues to recover following the easing of work from home guidance.
The trust has received or agreed monthly payment plans for 99% of first quarter commercial rents, with over 97% received. Some 99% of its residential units are occupied, and Hibernia has received 99% of rent for November, December and January.
Hibernia had net debt of €146m at the end of December with cash and undrawn facilities totalling €361m following the payment of a two cent per share dividend in late January, and the group assured shareholders it has "significant funding capacity for [its] upcoming development pipeline. "
Hibernia's in-place office portfolio now total 900,000 sq ft, and it has a vacancy rate of 11%, with the majority of available space located at its the Forum, Central Quay and 2 Cumberland Place buildings.
"We expect the vacancy rate in the in-place office portfolio to reduce in the near term," Hibernia said in a trading update. "Six office rent reviews are active over 161,000 sq ft: no material change to existing rents is expected."
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Hibernia confirmed the October sale of its Dockland Central property in Dublin's north docks for €152.3m as well as the agreement it struck in December to pre-lease 288,500 sq ft in its Harcourt Square office development to KPMG.
The professional services giant will sign a 20-year lease, starting in 2026, and pay initial annual rent of €17m, although Hibernia said the company will receive the equivalent of 40 months rent free through incentives and an enhanced fit out. KPMG also has the option to lease a further 48,500 sq ft in the 347,000 sq ft scheme on the same terms.
Hibernia also received an initial grant of planning, subject to appeal, for the refurbishment and extension of Hardwicke House and Montague House that will see the trust extend the property from 88,000 sq ft to 140,000 sq ft.
"With the pre-let of the majority of Harcourt Square to KPMG, the sale of Dockland Central and the achievement of an A-minus rating in our 2021 CDP Climate Change response we are making excellent progress on our key strategic priorities of asset clustering and ESG excellence," Kevin Nowlan, CEO of Hibernia, said.
“Ireland’s strong economic performance, together with high levels of foreign direct investment, helped occupier activity recover in 2021 and with health restrictions in Ireland now lifted, we are optimistic that the positive momentum in the office market will continue in 2022, absent an adverse change in the direction of the pandemic."
In a wider appraisal of the market, Hibernia said companies in the technology and professional services sector were driving office take-up in Dublin, with 1m sq ft leased in the final three months of 2021, compared to just 300,000 sq ft in the fourth quarter of 2020.
Take-up increased for the third consecutive quarter in the three months to the end of December, and Hibernia said a total of 1.6m sq ft was leased last year, which was slightly ahead of 2020 levels but less than half of the 3.3m sq ft let out prior to the pandemic in 2019.
The vacancy rate for "grade A" office space in Dublin city centre fell from 11.1% to 9.1% in the fourth quarter, and the overall vacancy rate of Dublin office space declined from 10.5% to 9.8% as letting activity increased.
Average rents in the city were "stable" at €57.50 per sq ft, and momentum in the marked picked up at the turn of the year with 0.8m sq ft of office space reserved and active demand of 3m sq ft, up from 0.3m sq ft and 2.3 sq ft at the end of 2020, respectively.
The update comes after BNP Paribas Real Estate revealed that the value of commercial property transactions totalled €5.5bn in 2021.
(Pic: Getty Images)
