Preliminary Results May 2017
Disclaimer This presentation (hereinafter "this document") has been prepared by Hibernia REIT plc (the "Company“ or “Group”) for information purposes 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 document is neither a prospectus nor an offer nor an invitation to apply for securities. 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 presentation. 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. Certain information contained herein may constitute “forward -looking statements” which can be identified by the use of terms such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, “continue”, “target” or “believe” (or negatives thereof) or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of, and no reliance should be placed on, such forward-looking statements. There is no guarantee that the Company will generate a particular rate of return. Pictured on cover: 1WML Reception/Town Hall 2
Agenda Highlights Financial results Market update Acquisitions and developments Portfolio management Conclusion and outlook 3
Highlights • Strong financial performance, driven by developments Portfolio value of € 1.2bn, up 9.9% in the year (1) (developments up 47.2% (1) ) and 7.4% in H2 (1) – – 12 month total property return of 14.5% vs IPD Ireland Index up 11.2% – EPRA NAV per share of 146.3c, up 11.9% in year EPRA earnings up 192.5% (2) to € 15.0m, dividend for year of 2.2c up 46.7% – • Development programme making excellent progress and enhanced by acquisitions – Three schemes completed, delivering 191k sq. ft. and profit on cost of 50% – Four committed schemes delivering 354k sq. ft. of offices over period to late 2018 – Pipeline expanded to 5 schemes (660k sq. ft.) with acquisition of Clanwilliam Court • Income and WAULTs increased significantly through leasing activity – 320k sq. ft. of new office lettings/lease extensions in the year – Contracted rent roll now € 48.3m, +24% in the year – WAULT to break of in-place offices now 6.7yrs, +56% in the year • Asset management initiatives – Building management department formed – Flexible workspace arrangement with Iconic Offices established • Modest leverage and flexible funding in place – Net debt € 155.3m, LTV 13.3% (March 2016 5.7%) – Cash & undrawn facilities € 288.9m, € 149.5m net of committed capex and anticipated repayment of 1WML facility (1) Net of capex and acquisition costs (2) Excl. € 4.9m surrender premium 4
Portfolio overview as at 31 March 2017 Portfolio by sector (by value) Office and development portfolio (by net lettable area) Residential Committed developments (pre-let) 10% Office IFSC Industrial 73k sq. ft. 22% 1% In-place office portfolio 915k sq. ft. Committed CBD Office developments Development (to let) 14% 280k sq. ft. Total: € 1.2bn Total: 1.7m sq. ft. (1) Office South Docks 15% Near term pipeline (2) 50k sq. ft. Office Traditional Core 38% Longer term pipeline (3) 336k sq. ft. Portfolio key statistics Number of In-place office rent In-place In-place properties Portfolio rent (4) and ERV (4) office WAULT (4) office vacancy Passing: € 42.2m Contracted: € 40psf To review/expiry: 3.5yrs 28 properties 3% Contracted: € 48.3m ERV: € 48psf (5) To break/expiry: 6.7yrs (1) Office areas only (i.e. excl. retail, basement space, gym, townhall etc.) (2) Cumberland Place (Phase 2) (3) Incl. incremental additional sq. ft. from Harcourt Square, Clanwilliam Court, Marine House, Earlsfort Terrace and Gateway (c.115k sq. ft. of office.) Note that there is also further development potential at Gateway for c.130k sq. ft. of offices (4) Excl. arrangement with Iconic Offices in Block 1, Clanwilliam Court (5) ERV as per CBRE @ Mar 17. Note: CBRE assume c. € 18.2m capex to achieve this ERV 5
Strategic priorities Increase rental income and duration Delivery of development Deploy capital into projects and preparation selective acquisitions or of pipeline of future new developments developments Maintain an efficient Recycle capital to balance sheet monetise gains and (target LTV 20%-30%) enhance forward returns Deliver improvements in environmental efficiency of portfolio Good progress made in the year with more to come 6
Looking ahead • Lots to come from portfolio in near term… – 354k sq. ft. of offices being delivered through four schemes in next 18 months Includes Hanover Building now added to committed schemes: 71k (1) sq. ft. to deliver by late 2018 o – Acquired in-place portfolio is 24% reversionary and has 3.2 years to rent review/expiry • …and longer term – Pipeline of five further developments with potential to add up to 386k sq. ft. of net new office space – 56% of pipeline already planning approved • Irish economy remains strong, Brexit still an unknown – Growth expectations raised – Expect Brexit movers will start to make decisions on destinations in H2 • Hibernia well positioned – Talented team – Clear strategy – € 149.5m of cash and undrawn facilities (2) Hibernia well positioned (1) 59k sq. ft. offices, 12k sq. ft. gym (2) net of committed developments and anticipated repayment of 1WML facility 7
Agenda Highlights Financial results Market update Acquisitions and developments Portfolio management Conclusion and outlook 8
Financial highlights Highlights EPRA NAV per share progression • Strong NAV growth in H2 due to development activity and 150c 146.3c new lettings 140c EPRA NAV per share (cent) +52% 130.8c • Letting activity and acquisitions have driven a substantial 130c uplift in net rental income and EPRA earnings 120c 111.8c • 1.45c final dividend proposed taking total for year to 2.2c 110c • Net debt increased to € 155.3m, LTV of 13.3% 96.4c 100c 90c Mar-14 Mar-15 Mar-16 Mar-17 Income statement Balance sheet 12 months to 12 months to ( €’000) ( €’000) 31-Mar-17 31-Mar-16 % change 31-Mar-17 31-Mar-16 % change (2) Net rental income (1) 39,681 25,389 56% Portfolio value 1,167,387 927,656 26% Revaluation gain 103,525 125,056 -17% Net debt 155,257 52,918 193% Net profit 118,586 136,797 -13% Loan to value 13.3% 5.7% 133% EPRA earnings (1) 14,989 5,124 193% Net assets 1,013,852 896,574 13% EPRA EPS (1) 2.2c 0.8c 193% EPRA NAV per share (cent) 146.3c 130.8c 12% Dividend per share 2.2c 1.5c 47% Substantial uplift in recurring distributable income due to letting activity (1) 12 months to Mar-16 figures excl. receipt of € 4.9m (FBD surrender) (2) Including capex & acquisitions 9
EPRA NAV per share movement since 31 March 16 Strong uplift in EPRA NAV per share since 31 Mar 16 150 2.2 Valuation uplift: 14.9c 146.3 Cumberland 9.1c (1.6) (Phase 2) 145 1SJRQ EPRA NAV cent per share Cumberland (1) 140 1WML +12% 5.8c Other South Docks 135 IFSC Traditional Core 130.8 130 Like-for-like in-place office valuation (2) : +2.8% All via ERV growth; negligible yield impact 125 Mar-16 Investment properties Development properties EPRA EPS Dividends paid Mar-17 reval. reval. (1) Cumberland Phase 1 (completed refurbishment in Sep 16) and Phase 2 (potential additional 50k sq. ft. on front site) both included in development properties for the period. From 30 Sep 16, Phase 1 is classified as investment property and Phase 2 remains as development property (2) Represents c. € 440m of properties excl. Harcourt Square, 1DC, 2DC & Clanwilliam Court 10
EPRA earnings movement since 31 March 16 Significant uplift in EPRA earnings since 31 Mar 16 ( €’000 ) € 25,000 Acquisitions in current year € 2,380 Acquisitions in current year € 2,380 Performance fee € 163 Acquisitions in prior year € 7,160 Acquisitions in prior year € 7,160 Other admin ( € 4,074) € 9,720 Lease renewals € 900 Lease renewals € 900 € 20,000 Lease expiries & other Lease expiries & other ( € 720) ( € 720) EPRA earnings ‘000 ( € 3,911) € 14,989 € 15,000 ( € 1,574 ) ( € 290 ) +50% € 5,920 € 10,024 € 10,000 +193% € 5,000 ( € 4,900 ) € 0 (1) Mar-16 Surrender New lettings Lease events/ Admin costs Finance costs Other Mar-17 premium on completed acquisitions (net) schemes (1) Net of income received i.e. Starwood promote fee (in ‘Other Gains & Losses’), which was net neutral for Hibernia 11
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