Stock market listed real estate investment trust, Hibernia, has reported net rental income of €45.7m for the financial year to the end of March. Net asset value per share - a key measure of performance - was 9% higher at just over 159 cent. The REIT's portfolio value stood at around €1.31 billion - up over 6.5%.
Kevin Nowlan, CEO of Hibernia, described it as a good year for the commercial property sector with net profit of €107m outperforming the market by almost 5%. Mr Nowlan said the stamp duty changes in the budget, in which the rate was trebled from 2% to 6%, had an impact on the valuation of property to the tune of about €53m. "We reduced profit by that amount. In the future, when we value property, it will be valued on the basis of the new rate," he explained.
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The Hibernia CEO said it was likely the stamp duty change was a move by the Finance Minister to reduce the tax incentives that were introduced to stimulate the market after the crash. "You're seeing the end of the capital gains tax exemption period over the next few years."
Kevin Nowlan described the market as being in a 'good place' at the moment. "From supply and demand in offices, we're seeing strong delivery of space and strong take up of space from tenants. If we have a strong property sector delivering buildings, we're going to have to see an injection of more capital into the market. "If you look back 18 months ago, there was a view that there was an oversupply. In the last 12 months, there was a high level of take-up which was twice the norm," he said.
"In Dublin City Centre, we normally have a million square feet of take up. In the last 12 months there was 2.2 million square feet of take-up. That means people are forward booking for this year. About 70% of buildings heading for completion are pre-leased," he added.
He also said there was evidence of a latent Brexit bounce in the industry. "A lot of tech companies that you would have seen growing in the UK are re-routing that growth to Ireland. Big organisations are taking vast quantity of space. There is growing nervousness that visa issues may be a big problem in the event of Brexit," he concluded.
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