Investor presentation Interim Results for the half year ended 30 June 2020
Disclaimer & Important Notice Thispresentation(hereinafter"thisdocument")hasbeen preparedby Yew GroveREITplc(the "Company“ or “Group”) forinformationpurposes only. This document has been prepared in good faith but the information contained in it has not been independently verified and does not purport to be comprehensive. This documentisneithera prospectusnoran offernor an invitationtoapplyfor securities. Nothing contained in this document shall form the basis of any contract or commitment whatsoever. No representation or warranty, express or implied, is given by or on behalf of the Company, its group companies, or any of their respective shareholders, directors, officers, employees, advisers, agents or any other persons as to the accuracy, completeness, fairness or sufficiency of the information, projections, forecasts or opinions contained in this document. In particular, the market data in this document has been sourced from third parties. Save in the case of fraud, no liability is accepted for any errors, omissions or inaccuracies in any of the information or opinions in this document and neither the Company and its group companies nor any of their respective employees, officers, directors, advisers, representatives, agents or affiliates, shall have any liability whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. Certain information contained in this document has been obtained from published and non- published sources prepared by other parties, which in certain cases have not been updated to the date hereof. While such information is believed to be reliable for the purpose used in this document, the Company does not assume any responsibility for the accuracy or completeness of such information and which has not been independently verified by the Company. Except where otherwise indicated herein, the information provided in this document is based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflectinformation that subsequently becomes available, or circumstances existing or changes occurringafter the datehereof. Forward-lookingstatements This document contains forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Group or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements speak only as at the date of this document. The Group will not undertake any obligation to release publicly any revision or updates to these forward-looking statements to reflect future events, circumstances,unanticipatedevents,newinformationorotherwiseexcept as requiredby lawor by anyappropriateregulatory authority. THIS DOCUMENT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SUBSCRIPTION OR SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR ANY SECURITIES NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT TO PURCHASE OR SUBSCRIBE FOR ANYSECURITIES 2
Agenda Introduction 4 Financial Highlights 8 Portfolio & Asset Management 15 Summary & Outlook 21 CharlesPeach MichaelGibbons JonathanLaredo Chief Financial Officer Chief InvestmentOfficer Chief ExecutiveOfficer 3
SECTION 1 Introduction 4
Yew Grove: credit focused property specialists Income security and capital stability Portfolio mix by Tenant type ▪ Specialist investors in offices and industrial buildings 100% tenanted by, and attractive to, FDIs and governmentbodies. 90% ▪ FDIs invest across Ireland (more than 50% outside Dublin). 80% ▪ The shortage of suitable properties in our targeted markets 70% mean rents are rising. 60% ▪ Despite the rapid growth of the portfolio, the credit quality 50% of the rent roll and its reversionary yield has been 40% maintained and even improved. 30% ▪ Validating a strategy by the strong collection performance 20% 10% throughout the pandemic and the maintenance of dividend 0% payments. IPO Dec-18 Dec-19 Jun-20 Jul-20 FDI Govt SME Large Enterprise Vacant Rent Roll and reversionary yields since IPO Collections and valuation robust ▪ Q1: 100% rent collected 160 12% ▪ 140 Q2: 97% rent collected: 2% deferred until Oct1 10% 120 ▪ Q3: 98% rent collected: 1.5% deferred until Oct1 8% 100 €mm 80 6% Ongoing discussions with those retail tenants that wereshut 60 4% between March andJune – less than 1% of portfolio by rent roll. 40 2% 20 0 0% In the past six months, our office & industrial properties have IPO Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Jul-20 risen in value, accompanied by a fall of €110k in retail - leading to a net portfolio reduction of €15k*. Yld at FV GRY Portfolio (LHS) *Millennium Park was only purchased in Feb 20 5 (change from purchase price)
YewGrove Only REIT specialising in commercial property outside of Dublin CBD Supportive marketbackdrop InvestmentStrategy ✓ Irelandwasthe fastestgrowingeconomyinEuropein2019 1 ✓ Goodqualityincomefroma portfolioofIrishcommercialrealestatein selectlocationsoutside Dublin’s CBD ✓ More than50% of recent FDIjob creationhas been outsideDublin 2 ✓ Focuson officeandindustrial assets Project Ireland 2040 supports targeted regional growth ✓ DublinCBDrents have exceededpre crisishighs,elsewhererents ✓ Highqualitytenantlist:Irishgovernmententities,statebodies, are mostly still below the level required to trigger construction large enterprises, IDA Ireland supported and other FDI andare stillrising,drivenbya supplydemandmismatch companies ✓ Opportunitiesto acquireassetsat levels significantly ✓ Activeassetmanagementto drive value below replacementcost ✓ InternallymanagedREITwithstrongshareholder alignment: 4%+ of equity held by management Attractive opportunity & pipeline Resilient rent roll 3 ✓ Covid-19 resilient rent roll: 37% in life sciences, 25% with ✓ Ex-CBDmarketis verysignificant,c. €13bn government entities and 18% in finance & business services ✓ Competition for assets is growing but the market is still ✓ SMEs represent less than 5% and only 1% in non-food retail institutionally under invested and purchase yields are still attractive,absolutelyand relatively ✓ 7.2% vacancy 4 rate and current lease negotiations give a near ✓ Manyexisting owners'wantto releasecapitalto redeploy term opportunity to increase the rent roll into their businesses by selling properties ✓ Low leverage means that we are well within banking ✓ YewGrove has a high profilewithpropertyownersand agents covenants. and a record of transactingefficiently ✓ Detailed and analytic risk process in making any acquisition ✓ Proven track record of deploying capital swiftly 1 – Source: Goodbody 6 2 – IDAdata, 2013to 2018.Approx 58% of FDIjob creation in 2018was outside Dublin 3 3 - As at 15/07/2020 4 - Vacancy rateby area 7.8%
2020: A resilient portfolio&high quality dividend Our focus on credit vindicated by performance in H1 Going into the pandemic Yew Grove was well positioned : • A core portfolio of institutional quality office and industrial buildings(97%) • Let to Government, multi nationals and large corporates (96%) • Moderate use of leverage (25% as a targeted net level) Performance has been market leading • Rent collection (Q1, Q2 and Q3) has been robust • Non- retail valuation increased by €95k on a like -for-like* basis – retail making up only c. 1% of the portfolio With a positive outlook : • WFH and Covid-19 concerns means medium term space planning is uncertain, but many of our tenants are still expanding. • Vacancy rates in our geographic target market have dropped to multi-year lows. Demand remains resilient with little speculative construction. • Current lease negotiations, design and build activity suggest continuing pressure on space and upward movement in rent levels Our quarterly dividend policy remains unchanged 7 *Millennium Park was only purchased in Feb 20 (change from purchase price)
SECTION 2 Financial Highlights
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