Hibernia REIT Plc $HBRN #HBRN is possibly the cheapest office REIT in Europe, at 0.66x NAV w/ a 4.7% dividend yield. HBRN owns a prime Dublin office portfolio, v. lowly geared at ~20% LTV -
$HBRN's valuation seems truly anomalous when one considers the quality of it's portfolio, comprising prime city offices leased to sticky government/tech/ blue chip tenant base, which had one of the strongest rent collection rates of any REIT across Europe through COVID lockdowns
$HBRN is trading at a v wide/inexplicable discount to listed peers, which trade at 0.8x - 1x NAV, while recent private mkt comps have completed at ~0.9x - 1x, including $BAM funds' take-private of Belgian comp #Befimmo $BEFB (~0.8x) - bloomberg.com/news/articles/…
Yew Grove REIT plc #YEW acquired by Canadian Slate Office REIT at a slight premium to NAV (~1.01x) - news.slateofficereit.com/news/news-deta…
And #workspace #WKP 's takeover of #McKaySecurities #MCKS at ~0.9x NAV, announced this morning - reuters.com/article/mckay-…
If $HBRN were to re-rate to the midpoint of its peer P/NAV range of 0.9x, this would imply a price of ~€1.56/share or ~36% above the current share price. As for downside -
- it’s actually hard to see ANY real downside to owning HBRN at the current price IMO - through the worst of the pandemic during 2020, $HBRN traded at an average price of €1.08/share, or -7% below the current share price -
- AND note 2020 price reflected a very dire outlook w/ commentators rushing to declare the death of the office & no prospect of COVID vaccine at that point. On this basis, $HBRN set-up today looks HIGHLY asymmetric, w/ 35% upside vs. 7% downside, for a reward/risk ratio of 5x !
I’ve written before about office REITs becoming PE-RE targets and as w/ $HBRN former peer Green REIT & now Yew Grove REIT/Befimmo/McKay, if public markets continue to misprice $HBRN 's obvious value then private markets will correct this IMO - valuesits.substack.com/p/pere-returni…
My original analysis on $HBRN can be read here - valuesits.substack.com/p/forced-purch… ...
And a recent update from my Monday newsletter can be read here - valuesits.substack.com/p/weekly-bulle…
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