CEO of Hibernia REIT Kevin Nowlan
Ireland’s biggest private landlord is Ires REIT (real estate investment trust).
According to the Sunday Business Post, it has spent almost €600 million acquiring a portfolio of some 2,377 apartments in Ireland.
Readers may recall the documentary, The Great Irish Sell Off, by editor of the Sunday Business Post Ian Kehoe.
In it, David Ehrlich, chief executive of Ires Reit, showed Mr Kehoe a two-bedroom apartment next to the Facebook offices in Dublin which was renting for €2,800 a month, in a block which has 99 per cent occupancy.
Further to this…
Readers may recall the 2015 documentary by David McWilliams, Ireland’s Great Wealth Divide.
In it, Mr McWilliams spoke to Kevin Nowlan, CEO of Hibernia REIT, a real estate investment trust which had raised over €600million from a variety of investors, including George Soros, by helping them find bargain properties in Ireland.
They had the following exchange:
Kevin Nowlan: “….a lot of property ends up in the Irish Times or in the Irish Independent for sale by receivers or whatever. We basically said we know enough people in Dublin to be able to go and buy the properties, without having to go to auction. Or having to go to the market. And we’ve done 18 deals, and 16 of them we’ve done off market. We’ve bought debt, we’ve, you know, we’ve done quiet deals with people, we’ve done deals with banks, we’ve done them in a variety of different ways. If you buy something in an active vibrant economy, below what it actually costs to replace it, you should be in pretty good shape to make money.”
David McWilliams: “Who, just in that case, who pays the outstanding debt then?”
McWilliams: “Not the taxpayer?”
Nowlan: “Well yes, I mean it is being factored in now. You move back three years and it’s factored into the bailout. I mean that…”
McWilliams: “So there is a massive transfer of wealth from the average Joe who pays tax to the incredibly wealthy guy who sees the opportunity.”
Nowlan: “He sees the opportunity and he works, you know, let’s say he bought, you know let’s say they bought those loans for 35c in the euro, or 30c in the euro and they sell them for 40c, they make their 10c and they move on. And it’s basically a bulk business model.”
McWilliams: “But the difference is the 35c in the euro means somebody else has paid the 65c, the 65c – and that’s the taxpayer.”
Nowlan: “The 40 to the 80, unfortunately, ends up on our…”
McWilliams: “On the taxpayer.”
Nowlan: “On our national debt.”
McWilliams: “The taxpayer ends up subsidising or financing or, in some way, underwriting the opportunistic move which is totally legal and totally within their rights of the already wealthy.”
Nolwan: “Yeah. Basically.”
Further to this…
The value of the property portfolio held by stock market listed Hibernia real estate investment trust or REIT rose by 9.9% to €1.167 billion over the year to the end of March.
Full year results published by Hibernia show it delivered a total property return of 14.5%.
That was considerably higher than the 11.2% return here for the property market as a whole as measured by the Society of Chartered Surveys IPD property index.
The rent roll from its portfolio of commercial properties was 24% higher at €48.3m amid strong demand in the Dublin office market in particular where rents are now past Celtic Tiger levels in some areas.
Hibernia chief executive Kevin Nowlan described the results as strong and said the company was proposing a 47% increase in its dividend to 2.2 cent, up from 1.5 cent the previous year.
He said dividends would become an increasingly important part of shareholder return for Hibernia investors in future as income from its portfolio increased.
Hibernia’s top tenants include the Office of Public Works from which it generates €6.6m in annual rent and Twitter, which pays €5.1m.
Forty seven per cent.
Previously: Good Rooms Gone Bad