Ireland’s second-ever real estate investment trust, Hibernia REIT, has raised €365m in its maiden capital raising from more than a dozen US and European institutional investors.
Hibernia REIT, which takes its name from the classical Latin name for the island of Ireland, secured €124.5m from five cornerstone investors, including Putnam Investments, Marsh UK, Wellington Management and TIAA-CREF.
Members of the Hibernia’s Board, chaired by Daniel Kitchen, and the new REIT’s investment manager, Nowlan Property REIT Management Limited, invested a combined €3.56m or just under 10% of total raised capital, to align managements interests with shareholders.
Based on Hibernia REIT’s expected average leverage ambitions of circa 30% LTV, the €365m raised will equate to a total spending power of around €475m.
Together with the €300m of external capital raised by Green REIT in July, which led the way in encouraging international investment in the Ireland recovery story, just over €660m in equity capital has been bee raised in less than six months.
Institutional investor interest is rising as a macro-to-micro momentum builds.
Ireland is to exit the three-year €85bn (£71bn) EU-IMF bailout programme in 10 days, on 15 December, backed by a parliamentary vote overwhelmingly in favour of doing so without a reserve credit line, such is the stage of the economy’s emergence from one of the deepest recessions in the Eurozone.
The economic momentum is supporting the occupier market, particularly among Ireland’s office market, which is supporting a recovery in rental growth and, in turn, prices.
Together with a gradually normalising banking market, these aligning positives have helped transaction volumes rise to more than €1bn for 2013, which is the largest annual tally since 2007. Many expect the deal flow next year to eclipse this year’s post global financial crisis record.
Nowlan Property will seek to deploy the bulk of Hibernia €364.96m capital within 18 to 24 months of its dual admission on the Irish and London main market stock exchanges, set for 8:00am on 11 December.
There are three major NAMA portfolios in Ireland which Hibernia REIT may seek to join the fray on bidding for: Central Park business and residential complex, which is seeking bids at €250m; the five-strong €120m Platinum Portfolio, a Dublin city centre office portfolio; and the circa €400m Project Holly, which includes legacy loans to developer Sean Reilly.
In a statement this morning, Kevin Nowlan, chief executive officer of Nowlan Property, said: “The level of funds we have raised will allow Hibernia to create a property portfolio of scale and quality. We see unique opportunities to invest and look forward to creating a portfolio of assets capable of delivering attractive, sustainable earnings for our new investors.”
Hibernia REIT is targeting prime located, institutional quality, income-producing properties primarily in the Greater Dublin area, with an office bias. In addition, industrial, warehousing and distribution, recreational, retail, residential and other Irish property assets will also be considered.
“As and when the re-pricing that is anticipated by the directors has occurred, the directors plan to have built a high quality income-producing portfolio and intend to continue to grow the business thereafter as an income-focused, active asset management property company,” Hibernia REIT said a statement.