HBRN.L Share News (HBRN)

LONDON (Alliance News) - Hibernia REIT PLC Friday said it has exchanged contracts to acquire Montague House and Hardwicke House in Dublin from Hardwicke Group in a partially deferred transaction valuing the buildings at EUR60 million or EUR692 per square foot.

The company said the transaction is initially being structured as a loan acquisition, with Hibernia paying EUR18.3 million and gaining immediate operational control of the buildings. Hibernia will have the right to take full ownership of the buildings at any time up to mid-2016 for an incremental fee of EUR41.8 million. Hibernia said it is likely to do so in December 2015.

Upon taking full ownership, the net initial yield, after costs, will be 4.4%, based on average passing rents of EUR30 per square foot, with all the income subject to rent reviews by the end of 2018. The net initial yield on the EUR18.25 million loan amounts to 7.7%.

Both properties were built in 1999 and provide 88,483 square feet of prime Grade A office accommodation across five stories and 56 basement car parking spaces. Both are multi-let to a range of high-quality tenants, including accountancy firm Deloitte, according to Hibernia REIT.

Of the current EUR2.7 million annual rent roll, 12% will be reviewed in 2016 and 88% is due to be reviewed in 2018, Hibernia said.

Hibernia REIT shares were quoted up 2.7% at EUR1.07 Friday morning.

By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews

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