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Hibernian's European commercial property fund lays strong foundations

Morley fund attracts €322 million - over a quarter of this from Irish investors

9th August 2007

In the four months since its launch Irish investors have put €87M into Hibernian’s European Commercial Property Fund. Amid talks of domestic economic slowdowns, rising interest rates and the prospect of lower property returns Irish investors have seen the attractions of investing in a high quality European property fund.

The reasons for investing in commercial property in Europe are clear – the market offers attractive yields with an improved and strengthened economic backdrop. The markets are experiencing rapid growth and most importantly, this type of investment fund offers diversification for investors looking to broaden their investment base as it offers a low correlation compared to UK property and other asset classes.

“In this diverse market, experienced fund managers can enhance total returns by investing in sectors and countries with potentially superior rental and capital growth prospects”, according to Gareth McQuillan, Marketing & Product Development Director, Hibernian Life & Pensions. “It’s a great opportunity for private investors to benefit from investment in the types of property that would be ordinarily out of their reach. Taking a step into the commercial property world and purchasing an office block or shopping centre is just not feasible for most of us but this fund gives the ordinary investor just that opportunity”. The underlying fund manager, Morley is Europe’s biggest property fund manager and has benefited from the strength of its institutional backing when bidding for prime properties, often being successful due to their scale and ability to close the deal quickly.

Primarily investing in France, Germany, Italy, Spain and the Nordic region the fund has in recent weeks purchased high quality office buildings in central Paris and Germany. By the end of this month, the purchase of properties in Madrid and Amsterdam are likely to complete. “About 70% of the property deals looked at so far are in France and Germany and we expect the fund will be equally split between the two markets, with a healthy spread across the rest of Europe,” said Hibernian Investment Managers head of property, Hugh Linehan. “The focus initially is on the prime end of the market to put together a strong portfolio of properties in locations where good rental growth is forecast”, he continued.

The fund aims to invest 80% - 90% in direct property, with half invested in offices and the balance in retail space and warehousing. No more than 40% of the funds value can be invested in a single country, or more than 15% in any single property. The indirect assets of circa 15% will be invested in a combination of property-related shares and cash.

Investors can access the fund for as little as €10,000 through their independent financial adviser and Hibernian or AIB Bank branches nationwide.

About Hibernian

  • Hibernian Group is Ireland’s largest composite insurer, ranked first for general insurance and top three for life and pensions.
  • Hibernian Group is a subsidiary of Aviva plc, the world’s fifth-largest insurance group and the UK’s largest insurance services provider (based on gross worldwide premiums at 31 December 2005), and is one of the leading providers of life and pension products to Europe, with substantial positions in other markets around the world. Aviva employs 58,000 staff worldwide.
  • Aviva’s principal business activities are long-term savings, fund management and general insurance, with worldwide total sales of £41.5 billion and assets under management of £364 billion at 31 December 2006.
  • Morley is the UK-based asset management business of Aviva plc. Firms within the Morley group of companies manage £169bn (€247bn) from offices around the world as at 30 April 2007.
  • With a strong track record in the property arena, Morley has seven European property funds focusing on a range of sectors and markets and over the last 24 months has acquired over 50 properties in 11 countries. These funds account for over €1.1bn of European assets under management.
  • In 2006 Morley Fund Management won two awards at the Central and Eastern European Real Estate Quality awards taking ‘Outstanding Company of the Year’ and ‘Investor of the Year’ for its Central European Property activities.
  • The product information above is for press release purposes only; full details are contained in the product literature available from Hibernian.
  • The value of property investments is generally a matter of valuer’s opinion rather than fact. In addition, property investments may not always be readily saleable and very occasionally there may be constraints on cashing in units.
  • The value of investments abroad may rise and fall due to exchange rate movements.

Media enquiries:

Alan Tyrrell
+ 353 1 898 5452

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