The Nest Egg Portfolio: Taking Profits On Hibernia REIT On Valuation Concerns

Seeking Alpha | Jul 13, 2019 at 3:35 PM
  • When I started the Nest Egg Portfolio a few years ago, I acknowledged REITs could play an important role to generate a certain level of recurring income in the form of dividends which could then be redeployed.
  • Despite a gross rental income of ‘just’ 57.6M EUR, the properties are valued at 1.45B EUR, indicating an EPRA Net Initial Yield (the European Public Real estate Association has provided guidelines to ‘standardize’ financial reporting in the European REIT sector) of just 3.6%.
  • At the current market rate (56.82 EUR per square foot), using a required rental yield of 6% would only add 9M EUR (less than 1% of the total current book value of the properties) to the NAV.