Interim Results November 2018
Disclaimer This presentation (hereinafter "this document") has been prepared by Hibernia REIT plc (“Hibernia”, 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 Group 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 Group will generate a particular rate of return. Pictured on cover: 1SJRQ development approaching completion & 50 City Quay, South Docks 2
Agenda Highlights Financial results Market update Disposals and acquisitions Developments Portfolio management Conclusion and outlook 3
Results summary 6 months to Sep-17 (3) 6 months to Sep-18 Portfolio value (1) +3.9% +5.2% Total property return (“TPR”) (2) +5.9% +7.2% TPR vs. IPD Ireland Index +1.5% +2.4% EPRA NAV per share +4.5% +6.2% EPRA earnings per share +38.5% +8.3% (1) Like-for-like change (incl. finance costs) (2) Excl. acquisition costs (3) Sep-17 metrics do not include increase in stamp duty which took effect in Oct-17 4
Business highlights 1. De-risking current developments and growing pipeline 4. Low leverage and significant undrawn facilities • • >50% of committed schemes of 222k sq. ft. now let Net debt of €164m, LTV 12.3% – Majority of space completing in next few weeks • Cash and undrawn facilities net of commitments of • €150m (3) Pipeline expanded – Interest at Newlands now 143.7 acres – 129 Slaney Road acquired – Office pipeline +8% to up to 543k sq. ft. (1) 5. Growing income = growing dividend • 1.5c interim dividend declared (+36% on prior year) • Expect further growth from increase in rental income and 2. Record income and WAULT following letting of 1SJRQ reduction in overheads (IMA expiry in Nov-18) • Contracted rent roll €60.9m, +9% since Mar -18 • WAULT to break/expiry of whole office portfolio now 7.7 years, +5% since Mar-18 3. Further profitable capital recycling into new opportunities • Sold New Century house for €65.3m (2) , ahead of book value • New acquisitions totalling €36.7m (2) – In period: several small acquisitions for €9.7m (2) – Post Sept-18: acquired 92.5 acres of land at Newlands for an initial €27m (2) (1) Area post-completion (2) Pre-transaction costs (3) Commitments comprise committed capital expenditure and acquisition of land at Newlands Cross (incl. transaction costs) announced in Nov-18 5
Looking ahead 1. Market dynamics remain favourable 3. …and longer term pipeline expanded • • Growing economy Now own 143.7 acres at Newlands – potential for • Strong demand for office and PRS from tenants and significant mixed-use scheme • investors, both domestic and international Three office schemes can add up to 265k sq. ft. of • Both office and PRS supply remains limited incremental new office space (previously 227k sq. ft.) • 129 Slaney Road added to pipeline 2. Still more to come in near term… • Un- let committed developments have ERV of €6.5m 4. Expect recycling of capital to continue – 172k sq. ft. of new offices completing in next few weeks, • Continue to seek opportunities to enhance returns finishing Windmill Quarter – 50k sq. ft. at Cumberland Place delivering in H1 2020 • In- place office portfolio has reversionary potential of €5.3m, 5. Hibernia well positioned with €2.0m of this currently under review (1) • Experienced team, clear strategy • Cash and undrawn facilities of €150m (2) • Transitioning to lower cost structure post-IMA expiry in Nov-18 (1) Passing rent of leases currently under review is €2.5m (2) Net of committed capex and Newlands Cross land acquisition (incl. transaction costs) announced in Nov-18 6
Agenda Highlights Financial results Market update Disposals and acquisitions Developments Portfolio management Conclusion and outlook 7
Financial highlights Balance sheet Sep-18 Mar-18 Change (1) Portfolio value €1,329.9m €1,308.7m +3.9% Net debt €163.9m €202.7m (19.1%) Loan to value 12.3% 15.5% (20.6%) Net assets €1,166.3m €1,111.7m +4.9% EPRA NAV per share 166.3c 159.1c +4.5% (2) Income statement Sep-18 Sep-17 Change Net rental income €26.6m €21.9m +21.5% Revaluation and disposal gains €51.1m €61.6m (17.0%) Profit before tax €64.0m €70.6m (9.5%) EPRA earnings €12.8m €9.0m +42.4% EPRA EPS 1.8c 1.3c +38.5% Interim dividend per share 1.5c 1.1c +36.4% (1) Like-for-like change (incl. finance costs) (2) Sep-17 metrics do not include increase in stamp duty which took effect in Oct-17 8
EPRA NAV per share movement since 31 March 18 170 1.8c 168 Valuation uplift: 6.9c 0.4c 166.3c 2.7c 166 (1.9c) 2WML 1SJRQ 4.2c 164 EPRA NAV per share IFSC +4.5% South Docks 162 Traditional Core 160 159.1c Resi 158 Other (1) Like-for- like “in - place” office valuation: +2.3% (2) (c.100% yield impact) 156 154 152 150 Mar-18 Investment properties Development Disposal gains EPRA earnings Dividends paid Sep-18 reval. properties reval. (1) Industrial (incl. land) (2) Represents c.€22m of the net property valuation uplift in the period 9
EPRA earnings movement since 30 September 17 Performance related pay (€0.7m) 1WML €1.9m Other admin (€1.1m) €16m 2DC €1.4m €1.5m €1.1m €14m €12.8m €3.3m €12m EPRA earnings €m (€1.8m) ( €0.3m ) +42% €10m €9.0m €8m Other gains (1) €1.1m Rent from acqs & disposals €0.2m New lettings & rent reviews €0.8m (2) €6m Income from Iconic arrangement €0.5m €4m €2m €0m Sep-17 Completed In-place lease Admin costs Finance costs Other Sep-18 developments events/acqs & (net) disposals (1) Fair value loss on share based payments recognised in the prior year (2) Includes some rent reviews yet to be settled (see slide 36 for further details) 10
Growth in distributable income Net rental income (NRI) growth EPRA EPS and dividend growth Interim DPS Final DPS EPRA EPS Surrender Premium H1 H2 50 3.5 45 3.0 40 2.5 35 €23.8m 30 1.9 Per share (c) 2.0 €22.9m NRI (€m) H1 19 EPRA EPS 25 €12.8m 1.5 1.5 20 0.8 15 1.0 €26.6m €12.5m €21.9m 1.5 10 €16.7m 1.1 0.5 0.75 5 0.7 €4.9m 0 0.0 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 Consistent growth in rental income, EPRA EPS and dividends 11
Substantial financial capacity in place Funding position at 30 September 2018 Net debt position reduced following net sales proceeds (2) of • 400 €55.6m in the period (primarily New Century House) • Through-cycle LTV target remains 20-30% 350 Remaining inv. • €100m of hedging expired in early Nov -18 capacity €150m LTV 25% (1) 300 • Continue to review debt funding options Net debt and LTV progression 250 Debt capacity (€m) Newlands acquisition • RCF €29m • 250 20% €400m • LTV 18% (1) Nov-20 200 Committed capex maturity €57m 200 • 205bps margin 15% • Floating charge 150 Net debt (€m) 150 Hedged LTV (%) €244m 10% 100 100 €203m Net debt €164m LTV 12% €181m €164m €155m 5% 50 €111m 50 €53m 0 0 0% Facility Drawings Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Expect to extend maturities and diversify debt sources in near term (1) Forecast LTV based on valuers’ estimates of GDV at Sept -18 and includes acquisition spend (incl. transaction costs) at Gateway announced in Nov-18 (2) Pre-transaction costs 12
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