Hibernia mulls offer for Green REIT

Hibernia REIT is mulling a bid for Green REIT, which put itself up for sale yesterday (15 April). The pair are close rivals in the Irish property market, with the most similar valuations out of the four major REITs in the country. The sale process is aimed at generating more value for Green’s shareholders as the firm has complained of a disparity between its share price and the value of its assets. It is understood that Hibernia has been keeping the potential acquisition under review for several months, tempted by the option of having greater scale and greater operating efficiency. The firm has not yet approached Green formally, but any potential deal would most likely involve a “share-for-share” merger, whereby the shares of one company are traded for another during an acquisition. These transactions are typically cheaper and more efficient as the acquiring firm does not need to raise capital for the deal. Green was the first REIT to be launched in Ireland, listing on the Irish Stock Exchange in 2013. Hibernia listed on the ISE a few months later that same year. Green has a €1.5bn (£1.3bn) portfolio of largely office and logistics assets, including several properties at Horizon Logistics Park in north Dublin and the Central Park complex in Sandyford, south Dublin. Some 83% of the portfolio is made up of offices in the Dublin area. Hibernia has a €1.3bn portfolio, which is 87% office focused plus a small portion of residential and industrial assets. Both Green and Hibernia’s share prices have hovered at a significant discount to their net asset value for the past few years. Green’s half-year results to 31 December show its share price trading at a 20% discount to its net asset value. Meanwhile, Hibernia, which is also trading at around a 20% discount to its most recently published NAV, launched a share buy-back programme of up to €25m in April. It used the programme to return proceeds from the €35.5m sale of a Dublin office block to shareholders, marking the first time it has bought back its own stock. Other Irish REITs include residential specialist Ires, which saw the value of its portfolio jump by 23% in 2018 to €921.3m, and Yewgrove, which was valued at €77.9m at the end of 2018. Hibernia and Green declined to comment. To send feedback, e-mail anna.ward@egi.co.uk or tweet @annaroxelana or @estatesgazette Photo: River Liffey, Dublin ©Michael Runkel/imageBROKER/REX/Shutterstock