Interim Results November 2016
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. 2
Agenda Highlights Financial results Market update Acquisitions and developments Portfolio management Conclusion and outlook 3
Highlights • 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 4
Portfolio overview as at 30 September 2016 Portfolio by sector (by value) Office and development portfolio (by net lettable area) Residential 11% (1) In-place office portfolio Industrial 961k sq. ft. Office IFSC 1% Committed developments 24% 230k sq. ft. CBD Office Development/Refurb 6% Total: 1.6m sq. ft. Total: € 1.0bn Office South Docks 17% Office Traditional Core Longer term development 41% pipeline (2) 399k sq. ft. Portfolio key statistics Number of In-place office avg. properties Portfolio rent contracted rent and ERV In-place office WAULT In-place office vacancy Passing: € 43.5m Contracted: € 38psf To review/expiry: 2.8yrs 28 properties 6% Contracted: € 46.2m ERV: € 46psf (3) To break/expiry: 5.9yrs (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 5 (3) ERV as per CBRE Sep 16 except for Harcourt Square which is internal Hibernia assessment
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 With a portfolio full of opportunity and substantial funding in place, Hibernia is well positioned (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 6
Agenda Highlights Financial results Market update Acquisitions and developments Portfolio management Conclusion and outlook 7
Financial highlights Highlights EPRA NAV per share progression • Letting activity and acquisition of Clanwilliam has led to 140c +39.6% substantial increase in property income and EPRA earnings (1) 120c EPRA NAV per share (cent) 100c • 0.75c interim dividend declared (50% of prior year dividends in line with policy) 80c 60c • Capital expenditure, acquisitions and valuation growth driving balance sheet uplift 40c 20c • Net debt remains low at € 110.5m, LTV of 10.7% 0c Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Income statement Balance sheet 6 months to 6 months to ( €’000) ( €’000) 30-Sep-16 30-Sep-15 % change 30-Sep-16 31-Mar-16 % change Property income (1) 16,686 12,537 33% Portfolio value 1,031,863 927,656 11% Revaluation gain 24,342 63,618 -62% Net debt 110,524 52,918 109% Net profit 32,296 73,743 -56% Loan to value 10.7% 5.7% 88% EPRA earnings (1) 7,989 5,173 54% Net assets 923,957 896,574 3% EPRA EPS (1) EPRA NAV per share (cent) 134.6c 130.8c 3% 1.2c 0.8c 50% Dividend per share 0.75c 0.70c 7% Substantial uplift in recurring cash earnings due to letting activity (1) 6 months to Sep 15 figures excl. receipt of € 4.9m (FBD surrender) 8
EPRA NAV per share movement since 31 March 16 EPRA NAV per share movement since 31 Mar 16 Valuation uplift: 3.5c 1.2 135 134.6 1.9c (0.8) (0.1) 134 1SJRQ 1WML Cumberland (1) 133 +3% 1.6c EPRA NAV cent per share Other 132 IFSC South Traditional Docks 130.8 131 Core 130 129 128 127 126 125 Mar-16 Investment Development EPRA EPS Dividends paid Other Sep-16 properties reval. properties 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 9
Substantial financial capacity in place Hedged Hedged € 100m (1) € 22m (2) RCF IPO P+OO 1WML facility Sources of funds € 400m € 372m € 286m € 22m Committed capex € 78m Remaining investment capacity € 234m Net cash invested Uses of funds € 768m € 0m € 200m € 400m € 600m € 800m € 1000m € 1200m Current LTV of 10.7%: if current facilities fully invested, LTV would be 31.8% (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) 10
Forecast capital expenditure for committed development schemes Forecast capital expenditure by financial year – committed developments Est. total Spent at Left to capex Sep-16 spend Project €m €m €m € 40m (1) One Dockland Central €10m €9m €1m Cumberland Place €29m €28m €1m 1WML (2) € 35m €26m €11m €15m Two Dockland Central Two Dockland Central 1SJRQ €55m €6m €49m € 3m € 9m (3) Two Dockland Central €12m - €12m € 30m Total committed €132m €54m €78m Completed scheme € 25m 1SJRQ € 20m € 20m 1SJRQ € 23m € 15m € 10m 1WML Cumberland Place € 10m € 1m € 5m 1SJRQ 1WML One Dockland Central € 6m € 5m € 1m € 0m Y/E March 2017 Y/E March 2018 Y/E March 2019 (1) € 7.9m net of dilapidations received (2) 50% interest (3) € 10.4m net of dilapidations received 11
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