Hibernia ‘confident’ in the Dublin office market as it experiences ‘modest’ fall in rent collection

Kevin Nowlan, the chief executive of listed landlord and developer Hibernia Reit, said the company “remain confident” in the long-term prospects of central Dublin’s office and residential market.

His comments come as thousands of employees around the country have been forced to work from home since March in order to limit the spread of the coronavirus.

“We believe the current crisis is underlining the importance of city centre offices as places for employees to work together and exchange information and ideas, and we remain confident in the long-term prospects of the central Dublin office market and the Dublin residential market and will continue to manage the business accordingly,” Mr Nowlan said.

Over 93pc of Hibernia’s commercial property rent covering the three months to June 30 has been paid, despite the impact of Covid-19 on businesses, according to annual results from the group.

Of the remaining rent, 3.5pc has been deferred, 2pc is due next month, while 1pc is outstanding.

Describing the impact on rent collection levels to-date as “modest”, the company said it is working with tenants who are having financial difficulties.

Meanwhile, 97pc of its residential rent for this month has been paid, in prior months rent collection rates were 99pc or above.

However, the company warned that the market outlook negative in the near term, with the full impact of the Covid-19 crisis on rental and capital values yet to be felt

Hibernia says it has prepared its buildings for increasing usage as the lockdown eases, with individual building plans covering access control, physical distancing measures, cleaning and sanitising and signage.

Elsewhere, building work has resumed at Cumberland Place in Dublin 2.

"The full impact of the Covid-19 pandemic on market rents and property values is yet to be felt but we are well positioned to withstand it,” Mr Nowlan said.

“We have amongst the lowest leverage in the European REIT universe, no debt maturities until December 2023, and a high-quality tenant base weighted towards the technology sector and State entities.”

In the 12 months to March 31 Hibernia, which is focused on the Dublin property market, reported a 2pc increase in the value of its portfolio to €1.5bn.

Annual contracted rent of €65.7m at the end of March is up 14pc year-on-year.

The company’s net asset value (NAV) – a standard measure of the operating performance of an investment property company – increased by 3.5pc to 179.3 cents.