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Hibernia REIT upbeat on Dublin office market

Hibernia REIT has made two acquisitions in recent months as it bought assets next to properties it already owns.

In a trading update covering the period from October to today, the commercial property firm said it spent €2.5m on the two acquisitions.

Hibernia REIT also said it was in negotiations with tenants to take 56,000 square foot of space in its redeveloped property on Cumberland Place in Dublin city centre.

In today’s trading update, Hibernia said the Dublin office letting market saw another highly active fourth quarter, following two relatively quiet quarters.

It noted that take-up exceeded 3.3 million square feet in 2019 as a whole.

While this was lower than 2018, when a record 3.9 million square feet was leased, a number of deals were outstanding at the end of the year, with over 1.3 million square feet of space reserved.

“In addition, active demand at year end stood at 3.8 million square feet, which should be supportive for the occupational market in 2020,” Hibernia REIT said.

Hibernia said the vacancy rate in its in-place office portfolio remains at 12% and is mainly across its 2WML, Central Quay and the Forum developments.

It said it has made good progress in lease negotiations for the majority of the space available, adding that it expects these to start concluding shortly.

Kevin Nowlan, chief executive of Hibernia, said that the Dublin office letting market ended 2019 strongly, with a pick-up in demand from tenants of all sizes, after a quieter period in the middle of the year, particularly for smaller occupiers.

“Levels of active tenant demand remain high and 2020 has started positively,” he said.

“Property investment market volumes set a new record in 2019 though it remains to be seen how the market reacts to the tax changes introduced in the recent Budget,” he added.

Mr Nowlan said Hibernia REIT had made good progress with the lease negotiations that are ongoing over much of the available space in the office portfolio.

“We continue to work on advancing our development pipeline and have made two small property acquisitions to enhance the future value of the assets we already own,” he said.

“Hibernia remains well-positioned with an extensive development pipeline, low financial leverage and a talented team,” he concluded.

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