Interim Results November 2016 Disclaimer This presentation - - PowerPoint PPT Presentation

Interim Results

November 2016

2

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,

• missions 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
• n, such forward-looking statements. There is no guarantee that the Company will generate a particular rate of return.

3

Market update Acquisitions and developments Portfolio management Conclusion and outlook

Highlights

Financial results

Agenda

Highlights

4

• Steady financial performance in first half

– EPRA NAV per share of 134.6c +3% since March 2016 – Net profit of €32.3m incl. revaluation gain of €24.3m bringing total portfolio value to over €1bn – Interim dividend declared of 0.75c per share

• Leasing activity growing rent roll and income duration

– 109k sq. ft. of new office lettings/lease extensions in the period – Contracted rent roll now €46.2m +18% on March 2016 – WAULT to break of in-place offices now 5.9yrs (+37% on March 2016)

• Development programme on track

– Cumberland completed ahead of schedule delivering profit on cost of 59%(1) – 3 committed schemes delivering 230k(2) sq. ft. of office space in the next 20 months – Longer term pipeline expanded to 7 schemes(3) (399k sq. ft.) with the acquisition of Clanwilliam Court

• Taking control of building management

– All multi-let buildings expected to be managed directly by mid-2017 – Intention to maximise service for tenants

• Low gearing and flexible funding in place

– Net debt €110.5m, LTV 10.7% – Cash & undrawn facilities €312m, €234m net of committed capex

(1) Including potential 50k sq. ft front site profit on cost is 71% (2) Office areas only (e.g excl. retail, basement areas etc.) (3) Assuming Marine House and Clanwilliam Court are repositioned independently

In-place office portfolio 961k sq. ft. Committed developments 230k sq. ft. Longer term development pipeline 399k sq. ft.

5

Portfolio overview as at 30 September 2016

Portfolio by sector (by value) Office and development portfolio (by net lettable area)

Office IFSC 24% Office South Docks 17% Office Traditional Core 41% CBD Office Development/Refurb 6% Industrial 1% Residential 11%

Total: €1.0bn Total: 1.6m sq. ft.

Portfolio key statistics Number of properties Portfolio rent In-place office avg. contracted rent and ERV In-place office WAULT In-place office vacancy 28 properties Passing: €43.5m Contracted: €46.2m Contracted: €38psf ERV: €46psf(3) To review/expiry: 2.8yrs To break/expiry: 5.9yrs 6%

(1) As at 30 Sept 16; office areas only (i.e excl retail & basement space); excl. 56k sq. ft. out of 72k sq. ft. of existing area in 2DLC under refurbishment (2)

• Incl. incremental additional sq. ft. from Harcourt Square, Hanover Building, Clanwilliam Court, Marine House, Earlsfort Terrace, Cumberland Place (Phase 2) and Gateway

(c.115k sq. ft. of office.) Note that there is also development potential at Gateway for a further c.130k sq. ft. of offices (3) ERV as per CBRE Sep 16 except for Harcourt Square which is internal Hibernia assessment (1) (2)

6

Looking ahead

• Plenty to come from Hibernia portfolio

– 1WML, 1SJRQ and 2DLC (230k sq. ft.) completing in next 20 months – Existing in-place portfolio (1) 27% reversionary(2) and with 2.1 years to next review / expiry – Pipeline of 7 longer term developments(3)

• Tenant demand remains strong despite some moderation in Irish growth expectations post UK referendum

– Dublin well-positioned to benefit from any business departures from UK over time – Impact of Brexit on Irish economy uncertain

• Proposed changes to tax rules for property ICAVs/QIAIFs

– No direct impact on REITs – Reaction to proposals and uncertainty of final outcome may impact investment market in near term – Possible acquisition opportunities for Hibernia

(1) Excluding recently completed developments (Cumberland, SOBO works & 1DLC) (2) All at valuers’ ERV Sep 16 except Harcourt Sq. which is internal assessment (3) Marine House and Clanwilliam Court treated as separate projects

With a portfolio full of opportunity and substantial funding in place, Hibernia is well positioned

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Agenda

Market update Acquisitions and developments Portfolio management Conclusion and outlook Highlights

Financial results

6 months to 30-Sep-16 6 months to 30-Sep-15 % change Property income (1) 16,686 12,537 33% Revaluation gain 24,342 63,618

• 62%

Net profit 32,296 73,743

• 56%

EPRA earnings (1) 7,989 5,173 54% EPRA EPS(1) 1.2c 0.8c 50% Dividend per share 0.75c 0.70c 7% 30-Sep-16 31-Mar-16 % change Portfolio value 1,031,863 927,656 11% Net debt 110,524 52,918 109% Loan to value 10.7% 5.7% 88% Net assets 923,957 896,574 3% EPRA NAV per share (cent) 134.6c 130.8c 3%

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Financial highlights

(€’000)

0c 20c 40c 60c 80c 100c 120c 140c Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 EPRA NAV per share (cent) +39.6%

Substantial uplift in recurring cash earnings due to letting activity

(1) 6 months to Sep 15 figures excl. receipt of €4.9m (FBD surrender)

Balance sheet EPRA NAV per share progression Income statement

(€’000)

Highlights

• Letting activity and acquisition of Clanwilliam has led to

substantial increase in property income and EPRA earnings(1)

• 0.75c interim dividend declared (50% of prior year

dividends in line with policy)

• Capital expenditure, acquisitions and valuation growth

driving balance sheet uplift

• Net debt remains low at €110.5m, LTV of 10.7%

130.8 134.6 1.2 (0.1) 125 126 127 128 129 130 131 132 133 134 135 Mar-16 Investment properties reval. Development properties reval. EPRA EPS Dividends paid Other Sep-16 EPRA NAV cent per share +3% 1.6c 1.9c

EPRA NAV per share movement since 31 March 16

EPRA NAV per share movement since 31 Mar 16

Traditional Core IFSC South Docks Other 1WML 1SJRQ

Valuation uplift: 3.5c

9

(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 Cumberland(1)

(0.8)

Net cash invested €768m IPO €372m Committed capex €78m P+OO €286m RCF €400m Remaining investment capacity €234m 1WML facility €22m €0m €200m €400m €600m €800m €1000m €1200m Uses of funds Sources of funds

10

Substantial financial capacity in place

Current LTV of 10.7%: if current facilities fully invested, LTV would be 31.8%

Hedged €100m(1) Hedged €22m(2)

(1) €100m hedged from Nov 16 to Nov 20. Hedging instruments are a combination of interest rate caps and swaptions with strike rates of 1% (reference rate is 3M Euribor) (2) Facility fully hedged per expected drawing schedule using interest rate caps with a 1% strike rate (reference rate its 3M Euribor)

One Dockland Central €1m Cumberland Place €1m 1WML €10m 1WML €5m 1SJRQ €20m 1SJRQ €23m 1SJRQ €6m Two Dockland Central €3m Two Dockland Central €9m €0m €5m €10m €15m €20m €25m €30m €35m €40m Y/E March 2017 Y/E March 2018 Y/E March 2019 Completed scheme

Project

• Est. total

capex €m Spent at Sep-16 €m Left to spend €m One Dockland Central €10m €9m €1m Cumberland Place €29m €28m €1m 1WML(2) €26m €11m €15m 1SJRQ €55m €6m €49m Two Dockland Central €12m

• €12m

Total committed €132m €54m €78m

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Forecast capital expenditure for committed development schemes

Forecast capital expenditure by financial year – committed developments

(1) €7.9m net of dilapidations received (2) 50% interest (3) €10.4m net of dilapidations received

(1) (3)

€2.9m €0.4m €6.9m €2.9m €6.1m €3.1m €1.0m €2.6m

€15m €25m €35m €45m €55m €65m €75m Contracted in-place rent roll at 30 Sep 16 To let Proforma

€56.4m +€10.2m +22%

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Potential incremental rent roll from committed development schemes

(1) Represents 50% interest/Incl. commercial units & residential (2)

• Excl. Camden St. and space occupied by Hibernia in South Dock House. Incl. vacant parking

associated with vacant units at values’ ERV (3) At valuers’ ERV 30 Sep 16/ Valuers’ ERV assumes capex of €17.3m (€9.7m on existing 2DLC space and €7.6m on existing Hanover Building space) to achieve these ERVs

Based on CBRE estimated rental values, Sep 16

Average office ERVs as per CBRE Sep 16:

• 1SJRQ:

€51.50psf

• Windmill Lane:

€48.60psf

• 2DLC (refurbished space):

€51.50psf

Committed schemes expected to add c.€10m to rents by mid-18 with more to come from asset management

In-place office reversionary potential(3)

Potential incremental rent roll @ valuers’ ERV

Vacant space

1WML(1) Vacant(2) space @ valuers’ ERV Incremental 2DLC 1SJRQ Purchases since Mar 16 Cumberland 1DLC €46.2m Completed developments SOBO

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Key financial messages

• Significant progress with lettings in half

– Contracted rent +18% to €46.2m since Mar 16 – WAULT to break for offices now 5.9yrs (+37% since Mar 16)

• Substantial financial capacity in place

– Current LTV of 10.7% – Cash & undrawn facilities of €312m, €234m including committed capex

• Interim dividend declared of 0.75c per share

– 50% of dividends paid in respect of prior year, in line with stated policy

• Building management department expected to be cost neutral once fully operational
• Relative performance fee calculation amended to include development assets

– No accrual made at half year for performance fees

14

Market update

Acquisitions and developments Portfolio management Conclusion and outlook Highlights Financial results

Agenda

2013 2014 2015 2016F 2017F 2018F Consumption (0.8%) 1.7% 4.5% 3.3% 2.8% 3.0% Government 0.1% 5.4% 1.1% 4.3% 2.0% 2.0% Investment (5.4%) 18.2% 32.7% 3.3% 7.3% 6.1% Domestic Demand (1.8%) 6.2% 11.2% 3.4% 4.0% 3.8% Core Domestic Demand* 1.9% 4.2% 5.4% 3.3% 3.7% 4.0% GDP 1.1% 8.5% 26.3% 4.3% 2.9% 3.5% 90 100 110 120 130 140 150 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 Dublin rents Outside Dublin rents

• 8
• 6
• 4
• 2

2 4 6 8

45 50 55 60 65 70 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Manufacturing PMI Services PMI Construction PMI No change

15

Economic outlook

…but healthy core domestic demand growth forecast Some softening in PMIs post UK referendum…

Source: Bloomberg/Markit Source: ESRI/PRTB, Q4 2010 = 100

Dublin residential rents have surpassed previous peak

50 = no change on previous month

Brexit vote, Jun-16

Source: CSO, Goodbody *Core domestic demand = domestic demand excl. R&D and aircraft leasing

95 100 105 110 115 120 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 Index level (Q4 2010 = 100) Dublin office jobs Total Irish employment (less Dublin office jobs)

Source: CSO, Q4 2010 = 100

Q3 2007 peak Dublin office jobs

Dublin office based employment continues growth

Q4 2007 peak Dublin rents

0% 2% 4% 6% 8% 10% 12% 14% 16% Dublin 1/3/7 Dublin 2/4 Dublin 6/8 IFSC City Centre South Suburbs North Suburbs West Suburbs Overall vacancy rate Grade A vacancy rate Other 22% Professional services 15% TMT 21% Financial services 14% Public sector 3% Undisclosed 25% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q3 2016 Millions Sq Ft Annual Dublin office take up 10 Year Average

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Rental market: Dublin office dynamics

Prime Grade A rents now €60psf on back of broad-based demand

Dublin office take-up of 1.9m sq. ft. in 9 months to Sept 16 Overall Dublin vacancy rate now 7.6% with the grade A vacancy rate at 2.1% in D2/4 (core CBD location)

Source: CBRE @ 30 Sep 16 Source: CBRE (1) YTD, Sep 16 Source: CBRE @ 30 Sep 16

Occupier take-up and active demand are broad based

Other 23% Professional services 3% TMT 37% Financial services 14% Public sector 6% Industry 17%

2015 to 2016(1) Active demand: 2.7m sq. ft.

5 5 5 2 9 9 5 5 6 2

1 28 22 12 18

10 20 30 40 50 60 <5k sq. ft. 5k-10k sq. ft. 10k-20k sq. ft. 20k-50k sq. ft. 50k-100k sq. ft. >100k sq. ft. No of Properties Dublin 1/3/7 Dublin 2/4 Dublin 6/8 IFSC Suburbs

Location of Grade A vacancies in Dublin concentrated in suburbs

Source: CBRE @ 30 Sep 16 Source: Cushman & Wakefield/Hibernia

0.2m 1.3m 1.6m 2.4m 3.0m 0.2m 1.1m 1.8m 1.7m 2.7m

0.0m 0.5m 1.0m 1.5m 2.0m 2.5m 3.0m 3.5m 2015 @ Mar 16 2015 2016 @ Mar 16 2016 2017 @ Mar 16 2017 2018 @ Mar 16 2018 2019 @ Mar 16 2019 Potential sq. ft. Expected year of completion

17

Hibernia currently expects 6.3m sq. ft.(1) of net new office space to be delivered by end 2019(2)

Source: Hibernia/CBRE estimates

Estimated development/refurbishment pipeline

Under Construction @ Mar 16 Planning Granted @ Mar 16 Planning Applied @ Mar 16 Pre-Planning @ Mar 16

Expected Dublin office development and refurbishment supply moving outwards

Under Construction Planning Granted Planning Applied Pre-Planning Completed Pre-let

CBRE 10yr avg. CBD take-up = 1.3m sq. ft. CBRE 2015 take-up = 2.7m sq. ft. CBRE 10yr avg. take-up = 1.9m sq. ft.

(1) Assuming c.1m sq. ft. of existing stock is demolished to facilitate new developments (2) 2016 to 2019 inclusive

Investment market update

18

High volumes in 2016 YTD but impact of tax changes uncertain

• Investment volumes remain high
• Evolution of investors active in market towards longer term funds (esp. for offices)
• Impact of proposed tax changes yet to be seen – may provide opportunities to acquire

€0.0bn €0.5bn €1.0bn €1.5bn €2.0bn €2.5bn €3.0bn €3.5bn €4.0bn €4.5bn €5.0bn 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 to Q3 2016 Office Retail Mixed use Industrial Residential Hotel Other Unknown

Recent active funds

Source: CBRE @ 30 Sep 16

Direct Real Estate Investment

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Agenda

Market update

Acquisitions and developments

Portfolio management Conclusion and outlook Highlights Financial results

20

• Acquired off-market in Jun-16 for €51m (€544psf)
• 93.7k sq. ft. of offices and 220 car spaces close to

Merrion Square in central Dublin

• Adjoins Marine House (acquired in Mar-16)
• Contracted rent at acquisition: €2.9m (€34psf); NIY
• f 5.0%
• Expect yield on cost to be c.7% when fully let

– in discussions with potential tenant for majority of vacant space

• Potential for significant redevelopment in future

(post 2020/21 lease expiries)

Acquisition:

Blocks 1, 2 & 5 Clanwilliam Court

Clanwilliam Court Marine House

Summary of committed development schemes

Sector Total NIA post completion (sq. ft.) Full purchase price Capex/Est. capex

• Est. total cost

(incl. land) €psf ERV(1) Office ERV psf(1) Expected PC Date Completed schemes in 6 months to 30 Sep 16 One Dockland Central Office 74k(2) €46m €10m(3) €736psf(4) €4.0m €50.40psf Completed in May 2016 delivering profit on cost in excess of 30% SOBO Works Office 11k €2m €1.3m €275psf €0.4m €36.00psf Completed in April 2016 delivering profit on cost in excess of 50% 1 Cumberland Place Office 122k(5) €51m €29m €651psf(6) €6.9m €51.05psf(7) Completed in Sept 2016 delivering profit on cost

• f 59%(8)

Total completed 207k €99m €40.3m(9) €11.3m Committed schemes Two Dockland Central (formerly Guild House) Office 73k(10) €46m €12m(11) €773psf(4) €4.0m €51.50psf Q3 2017 1WML(12) Office 61k office 3k retail 7 resi. units €4m €26m €420psf(7) €3.1m(13) €48.60psf late 2017 1SJRQ Office 112k office(14) 6k retail €18m €55m €634psf(7) €6.1m €51.50psf mid 2018 Total committed 246k office 9k retail 7 units €68m €93m(15) €13.2m

CONCEPT IMAGE CONCEPT IMAGE

(9) €38.2m net of dilapidation charge received (10) 57k sq. ft. is committed refurbishment of entire 73k sq. ft. (11) €10.4m net of dilapidations charge received (12) Represents 50% interest; includes extensions to 4th & 5th floors (2.3k sq. ft.) planning granted in May 16 (13) Commercial and residential (14)

• excl. c.1k sq. ft. of basement office and amenity

(15) €91.4m net of dilapidations charge received (1) Per CBRE valuation at 30 Sep 16 (2) 58k sq. ft. refurbished out of total 74k sq. ft. (3) €7.9m net of dilapidation charge received (4)

• Est. total cost psf. is net of dilaps

(5)

• Excl. additional basement areas (7.5k sq. ft.) and potential new block (c.50k sq. ft.)

but incl. new reception (1k sq. ft.) (6) No cost attributable to basement area (7) Office only (8) Including potential 50k sq. ft. front site profit on cost is 71% .

21

• Acquired in March 2015 for €51m
• Full refurbishment and extension commenced in Q4 2015
• Completed ahead of schedule in September 2016 at a total cost of

c.€29m

• Fully let to Twitter who occupy (96k sq. ft.(1)) and MTT (33k sq. ft.)
• WAULT to break of c.12yrs and WAULT to expiry of c.21yrs
• Contracted rent of c.€7m implying a yield on cost of c.9%
• Preliminary planning permission received from DCC for 50k sq. ft.
• ffice at front site

(1)

• incl. basement space and reception

Completed development:

1 Cumberland Place

22

CONCEPT IMAGE

Potential additional c.50k sq. ft.

• Situated in the SOBO (South of Beckett and

O’Casey bridges) District of Dublin’s South Docks

• 1WML (held in 50:50 JV with Starwood Capital)

− 122k sq. ft. of offices, 7k sq. ft. of retail and 14 residential units − Office construction and glazing largely complete and on track for practical completion by late 2017

• 1SJRQ

− 112k sq. ft. of offices and 6k sq. ft. retail − Main piling and groundwork complete and on schedule for completion in mid-2018

Committed developments:

1WML & 1SJRQ

23 Observatory Building Hanover Building 1SJRQ 1WML

Completed/committed developments:

One Dockland Central & Two Dockland Central

24

• Refurbishment of 58k sq. ft. in 1DLC completed in May 2016

− Space fully let to HubSpot and ComReg at average rents of €47.60psf − Including space let to BNY Mellon the building now has WAULT of 17yrs (WAULT to break of 10yrs) and contracted rent of €3.7m (6.9% yield on cost)

• Similar refurbishment of 57k sq. ft. in 2DLC to commence shortly

− Estimated cost of €12m (€10.4m net of dilaps) − Expected completion late 2017

• In discussions with potential tenants re pre-leases

Summary of longer term development pipeline

Name Sector Current NIA (sq. ft.) NIA post completion (sq. ft.) Full Purchase price Comments Cumberland Place (front block) Office 0k c.50k €0m(1)

• Potential for new block on front of Cumberland

Place of c.50k sq. ft.

• Preliminary planning received from DCC

One Earlsfort Terrace Office 22k >28k €20m

• Planning permission is in place for two extra floors

which would add c.6k sq. ft. to the NIA

• Potential for redevelopment as part of the wider

Earlsfort Centre scheme Hanover Building Office 44k office 15k retail(2) 58k office 12k gym/retail €21m

• Potential to fully refurbish and extend the current

building by adding c.13k sq. ft.

• Planning applied

Harcourt Square Office 117k on 1.9 acres 277k €72m

• Potential development of 277k sq. ft. of office

space and ancillary space

• Full planning consent received
• Seeking vacant possession: court hearing

expected early 2017 on OPW seeking lease renewal Blks 1, 2 & 5 Clanwilliam Court and Marine House Office 135k c.190k €80m

• Longer term refurbishment/redevelopment
• pportunity
• Potential opportunity to add in the order of 40%

to existing NIA across all 4 blocks Gateway Logistics/Office 178k on 14.1 acres c.115koffice(3) €10m

• Strategic transport location
• Full or partial redevelopment potential subject to

planning Total 511k 718k office 12k gym/retail €203m

(1) €49m excl. costs or €51m incl. costs paid for existing block which was refurbished and completed in Sep 16. No land value attributed to new block at acquisition (2) 4k sq. ft. in basement (3) Planned new offices of c.115k sq. ft. plus potential to add a further c.130k sq. ft. of offices

25

• 1.9 acre site with full planning permission for up to 277k sq. ft. NIA
• f new office space
• Currently let to An Garda Síochána (Irish police) through Office of

Public Works (OPW) on leases expired/expiring in 2016

• Hibernia seeking vacant possession to commence redevelopment
• OPW has applied for extension of occupancy which we are defending
• Court hearing expected in early 2017
• 44k sq. ft. of offices and 15k sq. ft. of retail building adjacent to

1WML

• BNY Mellon has exercised break to leave offices in Dec 16: expect to

extend occupation to Mar 17 on same rental terms

• Planning applied to extend building by c.13k sq. ft. as part of

refurbishment works

• We are still assessing extent of refurbishment/expansion

Concept image

Longer term developments

26 Hanover Building Harcourt Square*

*incl. Camden St.

27

Agenda

Market update Acquisitions and developments

Portfolio management

Conclusion and outlook Highlights Financial results

% of portfolio Initial Equivalent Reversionary Passing Rent (€m)

• 1. Dublin CBD Offices

Traditional Core €420m 40.7% 3.4% 2.9% 25.3% 4.2% 5.3% 5.7% €19.0m IFSC €243m 23.6% 2.4% 2.4% 32.7% 4.2% 5.1% 5.5% €12.0m South Docks €173m 16.7% 0.4% 0.4% 29.2% 3.3% 5.3% 5.6% €6.6m Total Dublin CBD Offices €836m 81.0% 2.4% 2.2% 28.2% 4.0% 5.3% 5.6% €37.6m

• 2. Dublin CBD Office

Development/Refurbishment €68m 6.6% 5.7% 5.7% 69.9%

• 3. Dublin Residential

€115m 11.1% 1.4% 1.4% 22.1% 4.4% 4.6% 4.6% €5.4m

• 4. Industrial

€13m 1.3% 6.0% 6.0% 26.6% 3.7% 7.1% 7.5% €0.5m Total Investment Properties (incl. offices) €1,032m 100.0% 2.6% 2.4% 29.5% 4.0% 5.2% 5.5% €43.5m Value as at Sept 16 (all assets) % uplift since Mar 16

• incl. new

acquisition (1) % uplift since Mar 16

• excl. new

acquisition(1) Yield on Value % % uplift since acquisition

• incl. new

acquisition (1)

28

Portfolio summary

Letting activity improving initial yields

(2) (4,5) (6) (4)

(1) Includes capex in acquisition costs and assumes 100% of South Dock House held for rent. (2) 1 Cumberland Place now and associated uplifts now in Traditional Core but value of site at the front is in Dublin CBD Office Development/ Refurbishment (3) South Docks excludes the value of space occupied by Hibernia (4) Excludes Harcourt Square as this is valued by CBRE on a residual/ development appraisal basis (5) Excludes all Dublin CBD Office Development/Refurbishment (6) Includes FBD surrender income top-up

(3) (2) (6) (4)

TMT 30% Banking & Capital Markets 27% Government Agency 23% Professional Services 11% Other 6% Insurance & Reinsurance 3% 14% 13% 7% 7% 5% 5% 4% 4% 3% 3% 35% Remainder

€40.2m €40.2m 29 Industry split of in-place tenants Top 10 tenants of in-place portfolio (by contracted rent)

In-place office portfolio statistics

In-place office portfolio statistics Contracted rent Sep-15 Mar-16 Sep-16 €22.2m +23% €27.3m +47% €40.2m

30

In-place office portfolio statistics

Contracted rent (€m/€psf) ERV (€m/€psf) WAULT to review(1) (yrs) WAULT to break/expiry (yrs) % of rent upwards

• nly(2)

% of next rent review cap & collar % of rent MTM(3) at next lease event Completed office developments €10.2m (€49psf) €10.4m(€50psf) 4.8yrs 11.1yrs 0% 83% 17%

• Cumberland
• SOBO Works
• 1DLC

Remaining in- place office portfolio €30.0m(€35psf) €37.9m(€45psf) 2.1yrs 4.1yrs 34% 0% 66% Whole in-place

• ffice portfolio

€40.2m(€38psf) €48.3m(€46psf) 2.8yrs 5.9yrs 25% 21% 54%

(1) To earlier of review or expiry (2)

• incl. small amount (<1%) of CPI linked

(3) Mark to Market

In-place office portfolio statistics (cont’d)

46% of office rent upwards only or capped and collared at next review

Letting up of completed developments significantly extending WAULTs

31

Office leases agreed and future lettings

Office leases agreed since Mar 16

Tenant Building Contracted rent €m Contracted rent €psf % of Group rent Term Notes To expiry To break Cumberland House €1.8m €53.85psf 4% 25yrs 11yrs

• Lease commenced in November 2016 (5 months rent free)

One Dockland Central €1.6m €50.00psf 3% 20yrs 11yrs

• Lease commenced in July 2016 (4 months rent free)

Central Quay €0.6m €52.50psf 1% 10yrs 3yrs

• Lease commenced in April 2016 (no rent free)

SOBO Works €0.4m €35.70psf(1) <1% 13yrs(2) 6yrs

• Lease commenced in April 2016 (10 months rent free)(3)

The Chancery €0.2m €37.20psf(4) <1% 15yrs 7yrs

• Lease commenced in June 2016 (3 months rent free)

Observatory €0.5m(5) €48.50psf 1% 10yrs 10yrs

• Jan 2017 rent review agreed at €48.50psf. Term extended by

5yrs to 2027 and break option in 2017 removed Total €5.1m 11%

Future lettings

Building Type Office NIA

• sq. ft.

Available from Notes Clanwilliam Court Office 23k sq. ft. Immediately

• In discussions with potential tenant for >90% of the space

Central Quay Office 18k sq. ft. Immediately

• In discussions with potential occupiers

Chancery Office 6k sq. ft. Immediately

• Marketing commenced

1WML(6) Office 61k sq. ft. Late 2017

• In discussions with potential occupiers

1SJRQ Office 112k sq. ft. Mid 2018

• Marketing commenced

2DLC Office 57k sq. ft.(7) Late 2017

• In discussions re: pre-leasing some of the space to be refurbished

Total 277k sq. ft.

(1) Stepped rent for 4yrs (2) Weighted average. Main office lease is for 15yrs (3) 6 months rent free plus additional 4 months rent free in lieu of landlord credit (4) Including mezzanine area (5) Incremental rent (6) Hibernia owns 50% (7) Refurbished space only

€0m €2.0m €4.0m €6.0m €8.0m €10.0m €12.0m Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Contracted Rent Six months ended

Valuers' ERV @ 30 Sep 16

32

Schedule of rent reviews(1) for in-place office tenants

To earlier of rent review or lease expiry

(1) To earlier of rent review or lease expiry. Excludes various parking licenses, retail space in office buildings, Parkrite in the Forum/Clanwilliam, Crossfit, Roof Antenna & AIB ATM. Also excludes any rent review dates or expiries prior to Sep 16 (2) Valuers’ ERV assumes capex of €17.3m across Hanover Building and 2DLC (3)

• Excl. FBD top up payment

Weighted average period to rent review or lease expiry of 2.1yrs excl. completed developments

• Avg. rent: €27psf(2,3)
• Avg. rent: €47psf
• Avg. rent: €47psf
• Avg. rent: €34psf
• Avg. rent: €52psf
• Avg. rent: €30psf
• Avg. rent: €36psf
• Avg. rent: €25psf
• Avg. rent: €37psf
• Avg. rent: €47psf

Current in-place office contracted rent: €40.2m

33

Agenda

Market update Acquisitions and developments Portfolio management

Conclusion and outlook

Highlights Financial results

34

 Plenty to come from portfolio in H2 and beyond  Brexit likely to bring opportunities for Dublin but timing and impact on Irish economy

unclear

 Proposed changes to tax rules announced in Budget add uncertainty to investment

market outlook in near term

 Hibernia well positioned to exploit any opportunities that arise Conclusion and outlook

Creating value through active management

35

Appendix

Location of portfolio

36

(1) property assets > €5m in value as at 30 Sep 2016

Key: Office Residential Industrial Office development

Source: Google Maps, Visit Dublin, Jones Lang LaSalle Croke Park Fairview Park River Liffey Kings Inns St. Stephens Green 9 8 7 6 2 12 13 14 4 5 11 10 15

Central Dublin portfolio(1)

1 Wyckham Point 2 New Century House 3 Gateway Site 4 Montague House 5 Hardwicke House 6 Chancery Building and Chancery Apartments 7 Hanover Building 8 1WML 9 Observatory 10 Guild House (Two Dockland Central) 11 One Dockland Central 12 The Forum 13 1SJRQ 14 Cumberland House 15 Harcourt Square 16 Dundrum View 17 Central Quay 18 One Earlsfort Terrace 19 Marine House & Clanwilliam Court

3

M1 M50 M50 N3/M3 N2/M2 M50

Dublin

N81

Howth Clontarf Dublin Airport North Bull Island Portmarnock Blanchardstown Clondalkin Tallaght Blackrock Ballsbridge Rathfarnham Phibsborough Drumcondra Castleknock Sutton Northern Cross Beaumont Ballymun The Ward Northwest Business Park Glenageary Dundrum Palmerstown Kimmage

N11

Ballymount

N4/M4 N7/M7

1 Wyckham Place 3 Gateway Site 16 Dundrum View

1 &16 3

Dublin Overview(1)

17 18 19

CBD

1 &16 Herbert Park

6 mths to 30-Sep-16 6 mths to 30-Sep-15(2) Revenue 18,306 18,405 Direct property costs (1,620) (968) Property Income 16,686 17,437 IM base fee

• (3,373)

Performance related fees (659) (1,500) Administrative expenses (5,620) (2,233) Net finance income / (costs) (2,719) (1,093) Net rental profit 7,688 9,238 Revaluation/other income: Investment properties 24,342 63,618 Other income(3) 379 887 Income tax (113)

• Total revaluation/other income:

24,608 64,505 Profit for the financial period 32,296 73,743 Diluted IFRS EPS (cents) 4.7 10.9 EPRA Earnings 7,989 10,073 EPRA EPS (cents) 1.2 1.5 30-Sep-16 31-Mar-16 Investment property(1) 1,031,863 927,656 Assets held for sale 843 3,921 Other non current assets 9,868 14,977 Cash and cash equivalents 16,909 23,187 Trade and other receivables 13,122 18,880 Gross assets 1,072,605 988,621 Current liabilities (23,521) (19,323) Financial liabilities (125,127) (72,724) Net assets 923,957 896,574 Equity share capital 677,867 672,398 Retained earnings 260,448 228,172 Dividends paid (15,615) (10,132) Other reserves 1,257 6,136 Total equity 923,957 896,574 IFRS NAV per share (cents) 134.8 131.6 Diluted IFRS NAV per share (cents) 134.6 130.7 EPRA NAV per share (cents) 134.6 130.8

37

Summary financial statements

Balance sheet highlights Summary income statement

(€ in thousands) (€ in thousands) (1)

• Incl. 50% interest in Windmill Lane

(2) Figures inclusive of surrender premium (€4.9m) (3) Profits arising on disposal of non-core properties and development management fees earned

TMT 21% Financial services 25% Professional services 23% Other 13% Public sector 18%

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Further statistics

France Germany Ireland Italy Netherlands Spain Sweden Poland 7% 7% 15% 5% 9% 7% 7% 6% 6% 10% 6% 3% 7% 3% 2% 1% Exports from Britain to: Exports to Britain from: 47% of UK exports go to EU 6% of EU exports go to UK

• 1,000k

2,000k 3,000k 4,000k 5,000k 1926 1936 1946 1951 1956 1961 1966 1971 1979 1981 1986 1991 1996 2002 2006 2011 2016

Dublin Leinster ex Dublin Munster Connacht Ulster (part of) State

Dublin office employment is broad based 2016 Census shows continued growth of Dublin population

Source: CSO Source: CSO @ Q2 2016 Source: IMF; 2014 (Value in USD millions); Destination of exports as % of national total

Britain and the EU need each other Housing commencements low by historical standards but increasing

Source: DoE; Note: above data represents 12 months trailing sum

• 10k

20k 30k 40k 50k 60k 70k 80k 90k Dec-04 Jul-05 Feb-06 Sep-06 Apr-07 Nov-07 Jun-08 Jan-09 Aug-09 Mar-10 Oct-10 May-11 Dec-11 Jul-12 Feb-13 Sep-13 Apr-14 Nov-14 Jun-15 Jan-16 Aug-16

Housing commencements

Dublin Leinster ex Dublin Munster Connacht Ulster (part of) State

39