2019 YEAR END RESULTS CONFERENCE CALL 1 D I S C L AI M E R - - PowerPoint PPT Presentation

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2019 YEAR END RESULTS CONFERENCE CALL 1 D I S C L AI M E R - - PowerPoint PPT Presentation

Irish Residential Properties REIT plc May 2020 2019 YEAR END RESULTS CONFERENCE CALL 1 D I S C L AI M E R Cautionary Statements This presentation has been prepared by Irish Residential Properties REIT PLC (the Company or I - RES)


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May 2020

Irish Residential Properties REIT plc

2019 YEAR END RESULTS – CONFERENCE CALL 1

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This presentation has been prepared by Irish Residential Properties REIT PLC (the “Company” or “I-RES”) for information purposes only. This presentation has been prepared in good faith but the information contained in it has not been independently verified and does not purport to be comprehensive. The Company is not undertaking any obligation to provide any additional information or to update this presentation or to correct any inaccuracies that become apparent. This presentation is neither a prospectus nor an

  • ffer nor an invitation to apply for securities. The information contained in this presentation is subject to material updating, completion, revision, amendment and verification. Any prospective

investor must make its own investigation and assessments and consult with its own adviser concerning any evaluation of the Company and its prospects. No representation or warranty, express or implied, is given by or on behalf of the Company, its group companies, IRES Fund Management Limited (“IRES Fund Management”) or any of their respective shareholders, directors, officers, employees, advisers, representatives, agents or any other persons as to the accuracy, completeness, fairness or sufficiency of the information, projections, forecasts or opinions contained in this presentation. 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 presentation and neither of the Company or IRES Fund Management, nor any of their 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 presentation or its contents or otherwise arising in connection with this presentation. Certain financial and statistical information contained in this presentation is subject to rounding adjustments. Accordingly, any discrepancies between the totals and the sums of the amounts listed are due torounding. This presentation contains 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 the negatives thereof) or other variations thereon or comparable terminology. Such forward-looking statements are based on the beliefs of its management as well as assumptions made and information currently available to the Company. Forward-looking statements speak only as of the date of this presentation and the Company and IRES Fund Management expressly disclaim any obligation or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation, including any changes in its expectations or any changes in events, conditions or circumstances on which these forward-looking statements are based. 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. To the extent indicated, certain industry, market and competitive position data contained in this presentation come from third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. While the Company believes that each of these publications, studies and surveys has been prepared by a reputable source, neither the Company nor IRES Fund Management have independently verified the data contained therein. In addition, certain of the industry, market and competitive position data contained in this presentation may come from the Company’s own internal research and estimates based on the knowledge and experience of the Company and IRES Fund Management in the Irish market. While the Company believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation. THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SOLICITATION OF ANY OFFER TO BUY 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 SHARES

D I S C L AI M E R

Cautionary Statements

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Highlights 2019 Trading Update May 2020

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2019 Financial Results Assets Portfolio and Growth Strategy ESG Strategy

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Trading Update May 2020

IRISH RESIDENTIAL PROPERTIES REIT plc

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I•RES REIT - Key Investment Attractions

  • No. of Units

Delivering Progress Across Key Performance Indicators Since IPO3

EPRA NAV per Share EPRA EPS Dividend per Share 1,204 2014

3,666

€0.995

€1.546 2019

2014

2019

2014

2019

2014

2019

1.6 cents

6.9 cents

0.68 cents

5.8 cents

  • Strategic deployment of

capital since IPO to grow portfolio

  • Generated stable, growing

dividends and NAV appreciation

  • Acquisition and

development plans to strategically grow portfolio further Effective Capital Allocation

  • Leveraging knowledge,

expertise and technology

  • f CAPREIT
  • Established platform with

65 personnel in Dublin

  • Occupancy of 99% at 30

April 2020

  • 81.4% Net Rental

Income margin in 2019 Established Operating Platform

  • Portfolio of 3,7391 high-

quality, modern assets.

  • Pipeline potential of

c.20% but delivery delays due to Covid-19

  • Located in desirable areas

in Dublin

  • Average asset age of

c.11yrs2

  • Gross yields of 5.6%2

Modern Asset Base with strong growth potential

  • Ireland - c. 20% projected

population growth by 2040

  • High housing demand

(supply shortage)

  • Strong presence of

international IT and Pharma companies as well as Food/Agri and Business Services

  • Attractive place to live

Attractive Market Backdrop & Growth Opportunities

1 As at 30 April 2020 2 As at 31 December 2019 3 As at financial years ending 31 December 2014 and 2019

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  • Average interest rate

below 2.0%

  • Long term laddered

maturity of debt ranging from 2024 to 2032

  • Diversified sources of

funding Robust Balance Sheet with Strong Liquidity

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Current macro environment challenging and uncertain as a result of Covid-19

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  • Significant Government income supports in place for workers and employers experiencing job

disruption due to Covid-19, which provides some assistance to tenants during these challenging times to maintain their rental payments. In addition to the Pandemic Unemployment payment, a temporary wage subsidy scheme commenced on 26 March 2020 for a 12 week period

  • A suspension on evictions and rent increases introduced for the duration of the Covid-19 emergency

period, 3 months from 27 March 2020. The current rent regulation, which provides for rent increases of up to 4% per year in rental pressure zones, remains in place until 31 December 2021

  • Non-essential construction sites closed for 7 weeks until 18 May 2020 with social distancing and other

requirements pertaining after this date. This has resulted in construction activity on the Company's active development sites and forward purchase contracts being temporarily suspended with delays to completion

  • f developments including Hansfield Wood, Merrion Road and Bakers Yard
  • Economic outlook unclear and economic forecasts continue to evolve as Ireland responds to the Covid-

19 pandemic

  • The Government has put in place a five-stage plan to reopen Ireland’s economy and society in a

phased manner, from 19 May 2020 to 10 August 2020

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Managing through Covid-19 uncertainty

Operational Highlights

  • Trading to April 2020 in line with expectations, however, Covid-19 uncertainty continues,

particularly surrounding governmental measures taken and economic impacts

  • Net rental income margin remained strong at 80.7% in Q1 2020
  • Demand remains robust, with occupancy of 99% at 30 April 20201
  • Residential rent collection rates of 98% in April 2020
  • Took delivery of 55 units at Waterside and 18 units at Tallaght Cross West during Q1 2020,

bringing the total units owned to 3,739

  • In relation to our tenants, we have enhanced cleaning and disinfecting at all properties as

well as an extensive programme of communication

  • Adapting and innovating for post Covid-19 world: enabling Wi-Fi in all properties to support

working from home, larger apartment sizes with balconies dominate portfolio Financial Highlights

  • Strong financial position, with a robust balance sheet and strong liquidity position
  • Dividend strategy continues, with a final dividend for the year ended 31 December 2019 of

€16.2 million, paid on 23 March 2020

1 This number excludes the units which have been made available to health service staff for the period of the Covid-19 crisis.

Number of Units Occupancy % Net Rental Income Margin %

99.8 99.8 98.3 99.0 90 92 94 96 98 100 2017 2018 2019 Apr-20

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Strong balance sheet with laddered maturity of debt and diverse funding mix

Facility €600m €200m note2 Diversify sources Syndicate of 5 banks Syndicate of international institutional investors Extended maturity 5-year term (option to extend to 7 years) Average maturity of 9.7 years Maturity dates 2024 (option to 2026) 2027 - 2032 Maintain a low interest cost 1.75%, plus the one- month or three-month EURIBOR rate (at the option of I- RES)3 1.92%4

1 As at 30 April 2020 2 Euro equivalent 3 €204m of the RCF is hedged at an effective swap interest rate of 1.66% 4 The Notes have a weighted average fixed interest rate of 1.92% inclusive of the swap.

  • Continue to execute on our funding strategy to:
  • Diversify sources of funding
  • Extend and ladder the maturity of debt
  • Maintain a low cost of debt
  • Maintain prudent leverage levels within covenants
  • The Company has €9.5m of cash and €210m of committed

undrawn debt under its RCF1 providing a strong liquidity position

  • Completed Private Placement of Notes of c.€200m2 in March

2020, with a weighted average interest rate of 1.92% and weighted average maturity of 9.7 years, laddered over 7, 10 and 12 year maturities

Funding Strategy RCF Notes

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2020 Annual General Meeting Irish Residential Properties REIT plc

Significant demand/ supply Imbalance persists Strong economic fundamentals 9

Estimated demand c.2x supply levels3 Available rental stock in Dublin 4 Population growth forecast2 Eurozone GDP forecasts in 20211

Ireland’s structural drivers of growth expected to reassert in time

1 IMF at 14 April 2020 , 2 UN Population Growth Forecasts, 3 CSO, ESRI , 4 Daft.ie

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2019 Financial Results

IRISH RESIDENTIAL PROPERTIES REIT plc

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99.8% 99.8% 98.3% €62.1m €50.6m €44.7m YE 2017 YE 2018 YE 2019 €50.5m €41.2m €36.3m YE 2017 YE 2018 YE 2019 €1,599 €1,596 €1,517 2017 2018 2019 €504m €620m €811m 2017 2018 2019 6.0c 6.5c 6.9c

2019 Highlights

– Acquisition of 815 unit Marathon Portfolio completed August 2019 – 118 houses delivered during 2019 under pre-purchase contracts

  • Entered into contracts for 219 units to be delivered in

2020 and 2021

  • Further development opportunities available, with

Planning Permission received for 627 units

  • c. 22.8% increase in Net Rental Income and Earnings
  • EPRA EPS up 6.2% to 6.9 cents (2018: 6.5 cents)
  • €56.2m increase in portfolio valuation

– 5.6% gross yield at fair value

  • EPRA NAV per share up 8.9% to 154.6 cents (2018:

142.0 cents)

  • Final dividend of 3.1 cents per share

YE 2017 YE 2018 YE 2019

Strong Financial Performance in 2019 Investments in Line with Our Growth Strategy

  • Growth of c. 37% since Dec 2018 bringing portfolio to

3,666 units, including:

Revenue from InvestmentProperties Occupancy Average Monthly Rent EPRA NAV 2017 2018 2019 EPRA Earnings per Share (€cents) Net Rental Income

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1 Excluding fair value of development land and investment properties under development 2 For definitions, method of calculation and other details, refer to page 24 of the Company’s 2019 Preliminary Announcement

Financial Results 2019

Grande Central, Sandyford, Dublin 13

Operating Performance

Period ended 31 December

2019 2018

Revenue from Investment Properties (€m) 62.1 50.6 Net Rental Income(€m) 50.5 41.2 EPRA Earnings(€m) 33.1 27.8 EPRA Earnings per share(cents) 6.9 6.5 Profit (€m) 86.3 119.8 Basic EPS (cents) 18.0 28.0

Portfolio Performance

2019 2018

Total Number of Residential Units 3,666 2,679 Overall Portfolio Occupancy Rate2 98.3% 99.8% Overall Portfolio Average MonthlyRent2 €1,596 €1,599 Gross Yield at Fair Value1,2 5.6% 6.1%

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Financial Results 2019

Strong Financial Position

As at 31 December

2019 2018

Total Property Value € 1,359.2m € 921.3m NetAssets € 810.2m € 618.7m EPRA NetAssets € 811.0m € 619.6m Basic NAV per share (cents per share) 155.3 142.5 EPRA NAV per share (cents pershare) 154.6 142.0 Group TotalGearing 40.8% 33.6%

New Syndicated Revolving Credit Facility

  • €450m facility finalised in April 2019
  • RCF increased to €600m in June 2019
  • 5 year term to 2024, with option to extend two further years
  • Lower costs

Equity Placing

  • 86.55m new shares placed in two tranches in June/July 2019 at

€1.55 per share

  • Raised c.€131m (net proceeds) to fund growth strategy

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Assets Portfolio and Growth Strategy

IRISH RESIDENTIAL PROPERTIES REIT plc

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Large Asset Base Located Across Dublin

Notes: (1) Portfolio expected as of Dec-21F, including units from Merrion, Waterside and Hansfield Wood (95units) under construction; (2) Not shown on map West City Units

40 Camac Crescent 90 41 Landsdowne Gate 224 42 Tyrone Court 95

Cork2 Units

43 Harty's Quay 50

30 15 14 05 07 16 24 01 13 40 42 41 03 02 22 25 23 06 26 31 32 38 36 37 39

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29 33 34 35 20 17 18 21 19 10 11 08 09 04 27 Dublin Cork

Portfolio Overview (including all committed forwardpurchases) Key Highlights

Portfolio to reach 3,964(1) units by 2021 based on committed forward purchases 43 high quality properties in total – 42 of which are spread across Dublin Marathon acquisition provided a first entry into the wider Irish market with one property in Cork through 50 well- established rental apartments Total No. of Units

3,964(1)

South Dublin Units

01 Beacon South Quarter 225 02 Grande Central 65 03 Rockbrook Grande Central 81 04 Rockbrook South Central 189 05 Bessboro 40 06 The Forum 8 07 Elmpark Green 201 08 The Maple 68 09 Time Place 67 10 Beechwood Court 101 11 Belville Court 29 12 Merrion(1) 69

City Centre

13 Kings Court 83 14 The Marker Residence 85 15 Bakers Yard 147 16 City Square 24 17 Xavier Court 41 18 Spencer House 12 19 Coopers Court 14 20 Richmond Gardens 98 21 East Arran Street 12

West Dublin

22 Priorsgate 103 23 The Laurels 19 24 Tallaght Cross West 460 25 Coldcut Park 91 26 Hansfield Wood(1) 194 27 Belleville & The Mills 21 28 The Oaks 14 29 St Edmunds 18

North Dublin

30 Charlestown 235 31 Hampton Wood 128 32 The Coast 52 33 Carrington Park 142 34 Heywood Court 39 35 Northern Cross 128 36 Russell Court 29 37 Taylor Hill 78 38 Semple Woods 40 39 Waterside(1) 55

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Committed pipeline

1 Figures as at 31 Dec 2019. Residential only, excludes commercial and land;

Market leading Portfolio of Assets with Strong Pipeline for Growth

Location Planning Received not yet commenced Priorsgate (Bruce House) 31 Priorsgate (Conversion) 5 Beacon Square South (B4) 84 Rockbrook 428

Total uncommitted 548 Uncommitted pipeline (developments)

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Location Assets under construction* Bakers Yard 61 Hansfield Wood 95 Merrion 69 Total Committed 225

*Delivery schedules impacted by Covid-19 restrictions

Property Location Units South Dublin 1,074 City Centre 455 West City 409 West Dublin 807 North Dublin 871 Cork 50 Total at 31 December 2019(1) 3,666 Units Delivered in 2020 Waterside 55 Tallaght Cross West 18 Total at 30 April 2020 3,739 Committed pipeline 225 Owned and committed 3,964 Uncommitted pipeline 548 Pro Forma I-RES Portfolio 4,512

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1 Portfolio including Marathon; 2 Excluding the Cork property; 3 As at 31 December 2019 4The Daft.ie Rental Price Report Q1 2020

23% 64% 12% 1% 1 Bed 2 Bed 3 Bed 4 Bed

Distribution by Split of Bedrooms(1)

40% 54% 5% 1% €1,000 to€1,500 €2,000 to€2,500 €1,500 to€2,000 > €2,500

Distribution by Average Monthly Rent(1)

3% 5% 59% 21% 1% 6% 5% 8 to 10 < 2 11 to 13 2 to 4 14 to16 5 to 7 17 to 22

Distribution by Age (Years)(1)

Majority of portfolio formed of 2-beds which suit home working Focus on mid-tier affordable market, which is the most defensive segment I-RES average rent of €1,5963 compared with average rents in Dublin of €1,762 - €2,2494 Existing Portfolio entirely located in locations with amenities and good transportation links Young, modern, portfolio, average age of 11 years Favourable for managing

  • ngoing maintenance and

capex requirements

✓ ✓ ✓ ✓

Properties by Location(1)(2)

33% 42% 15% 10% Prime Suburbs Inchicore / Drimnagh Secondary Suburbs City Centre

Modern asset base, with strong occupancy levels, supported by competitive rental levels

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Multi-Channel Growth Strategy to Deliver Sustainable Long-Term Growth

  • Continued evaluation of new

acquisition opportunities in attractive urban locations

  • Following criteria considered:

▪ Good transportation links,

community infrastructure – in particular, schools

▪ Local employment ▪ Family-friendly

neighbourhoods

  • Forward purchase agreements

with local builders and developers for new supply of multi-family and single-family units

  • Opportunity to add approx.

609 apartments at currently

  • wned I•RES properties
  • Partially completed foundation

infrastructure (e.g. parking) already in place at Rockbrook site Acquisition of Completed Assets

1

Development Partnerships

2

Development

  • f Existing I•RES Properties

3

Disciplined capital allocation policy to generate value and growing dividends for I•RES shareholders

I•RES REIT Growth Strategy remains intact and continues to provide optionality

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2018 2019

  • Acquisition in February 2019 for
  • c. €14m1
  • Leased at gross yield: c.6.1% 2

The Coast

52 units

  • Acquisition in May ‘19 for c.

€18.5m1

  • Delivered in Q1 ‘20
  • Expected gross yield: c.6.5%

Waterside

55 units

  • Pre-purchase agreement in NoV 2018
  • To be handed over by Q4 ’21 for c.

€47.1m1

  • Expected gross yield: c.5.6%

Merrion Road

69 units

  • Development agreement in

Nov 2018 for €30m1

  • To be handed over in mid-2020
  • Expected gross yield: c.6.6%

Hansfield Wood II

95 units

  • Acquisition in May 2018 for

€40m1

  • Leased at gross yield: c.6.3%2

Hampton Wood

128 units

Key: Hansfield Wood I

99 units

  • Took delivery during 2018
  • Agreement entered into with local

developer in November 2017

  • Leased at gross yield: c.7%2
  • Acquisition of 815 unit Marathon

Portfolio completed August 2019 for €285 million

  • Expected gross yield: c.5.1%

Marathon XVI Portfolio

815 units

1 ExcludingVAT but includingtransactioncosts 2Gross Yield as at 31 December 2019 (passing rent as at 31 December 2019, divided by purchase price (including VAT and excluding transaction costs))

Completedacquisition Forward purchases / development agreements Development

Strong Execution on Growth Strategy 2018 and 2019

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Building a diverse, significant portfolio, primarily focused on the Dublin area and other large cities in Ireland 627 815 172 2,679

I•RES Investment Properties 2019 as at 31 Dec 2018 Acquisitions & Forward Purchases 2020 Forward Purchases Acquisition of Marathon XVI Portfolio (2019) Opportunity for Development of ExistingProperties (2019- 2022)

4,512units

Pro Forma I•RES Portfolio

  • No. of units

150 69

2021 Forward Purchases

  • Agreement entered in March 2019

for c. €38.2m1

  • Handed over in Q4 ‘19
  • Expected gross yield: c.6.7%

Donabate & Balbriggan

118 units

Development Pipeline

609 units

  • Delivered in Q1 ‘20
  • Expected Gross yield: c.5%

Tallaght Cross West

18 units

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ESG Strategy

IRISH RESIDENTIAL PROPERTIES REIT plc

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ESG is Central to IRES’ Strategy

  • Sustainability is central to IRES’

mission and strategy

  • ESG objectives focus on the

sustainability of building development and management practices, community engagement, and tenant comfort and safety

  • Support to Covid-19 Crisis through

provision of accommodation and car parking to health care staff on a pro bono basis as well as company and employee support for various charitable causes over the last 2 months

  • Strong drive to deliver high-quality

and high performing buildings

  • IRES “Green Ambassador” to help

maintain and improve environmental performance

  • Through our commitment to place

making and community building, we seek to distinguish IRES in the market

Key Highlights ESG Framework Overview

IRES Built Environment IRES Communities Governance

  • IRES meets Irish energy codes
  • Pursues further opportunities to

reduce carbon footprint

  • 1. Energy Reduction

✓ Building Energy Rating Certificates (54% BER: A-B) ✓ Irish Green Building Council Member ✓ In 2019: 6757kg of CO2 saved

  • 2. Waste Diversion

✓ 100% diverted from landfill ✓ Recycling of glass bottles on all sites ✓ Increased segregation of non- domestic waste

  • 3. Water Conservation

✓ Water conserving taps and fixtures

  • Committed to support

sustainable community development

  • Improve resident experience
  • Greater employee engagement
  • Community building events

such as volunteering and fundraising ✓ Focus on occupant safety ✓ Ground Blitz day ✓ Dragons at the Docks boat race ✓ Sponsor to Naomh Olaf GAA Club ✓ Charity fundraising events by employees

  • Committed to identify and
  • ptimise opportunities for

continued improvement in ESG performance ✓ Highly experienced Board ✓ ESG Steering Committee led by CEO ✓ Ongoing review of policies and training

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A Place to Call Home

2018 Annual Shareholders’ Meeting Irish Residential Properties REIT plc 17

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