Interim Results November 2014 DISCLAIMER This presentation - - PowerPoint PPT Presentation

Interim Results

November 2014

DISCLAIMER

2

This presentation (hereinafter "this document") has been prepared by Hibernia REIT plc (the "Company") and WK Nowlan REIT Management Limited ("WNRML"), the Company’s investment manager, 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. The Company is not undertaking any obligation to provide any additional information or to update this document or to correct any inaccuracies that become apparent. This document is neither a prospectus nor an offer nor an invitation to apply for securities. The information contained in this document is subject to material updating, completion, revision, amendment and verification. This document does not constitute or form a part of any offer for sale or solicitation of any offer to buy or subscribe for any securities. 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, WNRML 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

• r inaccuracies in any of the information or opinions in this document.

Certain information contained herein constitutes "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. 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. The Company has not been, and will not be, registered under the US Investment Company Act of 1940, as amended, and investors are not entitled to the benefit of that Act.

3

Operating and financial highlights

Market update Portfolio summary Conclusion and outlook

Agenda

Overview

OPERATING AND FINANCIAL HIGHLIGHTS

(1) Since IPO by purchase price

4

• Highly active but disciplined period of investment
• €397m invested and committed in Dublin property in 12 transactions (since IPO €476m)
• Competition avoided where possible: 87% of acquisitions(1) off-market and 44% through secured loans
• Have walked away where prices exceed our valuations
• High quality Dublin property portfolio assembled
• 81% Dublin CBD offices, remainder across Dublin residential, office development sites and industrial
• Dublin CBD office portfolio yield on cost 5.5% (5.8% on contracted rent) off average rents of €34psf
• Substantial development opportunities, majority with existing planning
• Strong financial performance
• NAV of 104.7 cent, up 8.6% since March 14
• Driven by 9.6% valuation uplift on contract price in weighted avg. hold period of 3.9 months
• Funding in place to take advantage of investment opportunities
• Secondary equity issue successfully completed in early November: current cash and committed facilities
• f €330m
• €100m revolving credit facility entered in August 2014
• Further incremental firepower of c. €360m if leveraging existing equity base to 40% LTV
• Maiden dividend declared
• €2.0m to be paid over enlarged share capital: 0.3 cent per share

• Maiden dividend of 0.3 cent per share declared
• Deployed

€476m across

• ffice,

residential, and industrial property assets in 13 acquisitions



€408m investment properties



€69m in secured loans

• 81% by value of property portfolio in Dublin CBD offices



NIY on cost: 5.5%(1)



NIY on cost on contracted rent: 5.8%(2)

• 6% by value in Dublin CBD office development sites
• All
• ffice

acquisitions within Dublin CBD; ex-CBD acquisitions both with good transport links

• Option for vendor to enter into JV structure on Windmill

Lane development

• Net proceeds fully invested within 9 months of IPO
• €100m RCF in place, LTV well below 40% if fully drawn
• €25m drawn as at 30 Sept
• Portfolio valuation as at 30 September 2014 shows

9.6% uplift on purchase price on weighted average period from exchange of 3.9 months

Delivery since IPO

5

OPERATING AND FINANCIAL HIGHLIGHTS

• Build diversified portfolio of property types

      

Hibernia has delivered on its strategy since IPO



Strategy proposed at IPO Achieved

• Majority in prime office buildings
• Full scale development of up to 15% of NAV
• Primarily Dublin CBD or Greater Dublin area
• Ability to enter JVs
• Deploy a significant portion of the net proceeds

within 18 to 24 months

• Gearing not to exceed 40% of portfolio
• TSR of 10-15% p.a. (pre-taxation)

(1) Post completion of acquisition of The Forum (2) Assumes The Forum is completed and option for Hardwicke House and Montague House is exercised

Purchased via Loan €208m 44% Direct Property Acquisition €268m 56% Name Contract signing month Initial investment Type Net initial yield on cost Acquisition type Acquisition structure Dorville Portfolio (key assets: Wyckham Point, South Dock House and Cannon Place) Feb €67m Dublin Residential, Dublin CBD Office (Loans + receivables non-core assets)(1) n/a Off-market Loan (6) New Century House Mar €47m Dublin CBD Office c.6%(2) Off-market Property Gateway Site Apr €10.1m Industrial c.4% On-market Property Montague House and Hardwicke House May €18.3m(3) Dublin CBD Office c.8% Off-market Loan Chancery Building and Chancery Apartments May €16m Dublin CBD Office c.7% Off-market Loan Hanover Building May €20.2m Dublin CBD Office c.7% Off-market Loan(7) Windmill Lane May €7.5m Dublin CBD office development/refurb n/a Off-market Property Observatory Jun €51.5m Dublin CBD Office c.4%(4) On-market Property Guild House and Commerzbank House Jul €90.8m Dublin CBD Office c.7% Off-market Property The Forum Aug €37.8m(5) Dublin CBD Office c.7% Off-market Property 1-6 SJRQ Aug €17.8m Dublin CBD office development/refurb n/a Off-market Property Cumberland House(8) Aug €38m Loans + receivables 6% Off-market Loan BH Loan Portfolio Sep €2m Dublin Residential n/a Off-market Loan Total invested €424m Total committed to complete acquisitions €42m Acquisition costs €10m Total deployed incl. acquisition costs €476m

Summary of acquisitions to date

6

OPERATING AND FINANCIAL HIGHLIGHTS

Notes (1) Dorville acquisition includes €29m of assets (by cost) of non-core assets (i.e. held for sale) (2) Once rent abatement period ends in September 2015 (3) Hibernia REIT has the right to take full ownership for an incremental €41.75m (4) Once rent free periods end in 2015 and 2016 (5) Completed on 7 November 2014

Off-market €413m 87% On-market €63m 13%

Summary by cost

Dublin CBD

• ffice

€336m 71% Industrial €10m 2% Dublin Res €36m 8% Dublin CBD

• ffice

development / Refurb €26m 6% Loans + receivables €69m 14%

Since commencing operations in January 2014, €476m of capital deployed

(6) Transfer of Wyckham Point to direct property ownership now occurred (7) Transfer to direct property ownership now occurred (8) Hibernia has provided 6 month secured loan to owners of Cumberland House to facilitate a potential acquisition

On vs. off market Purchase method Asset type

Financial highlights as at 30 September 2014

7

OPERATING AND FINANCIAL HIGHLIGHTS

NAV increase due to valuation uplift: maiden dividend declared

Note: Unaudited financials

• 8.6% uplift in NAV driven by valuation increase on

investment properties

• Current liabilities principally comprises RCF

drawings (€25m) and balance owed on Forum acquisition (€35m)

• Non-current liabilities in relation to deferred

acquisition of Hardwicke & Montague House

• Increased revenue due to rental and interest income

from properties and secured loans

• Other gains & losses relates to gains on subsequent

recognition of Dorville core assets as investment property at fair value

• Expenses growing as Investment Manager fee

increases with invested NAV

Balance sheet 30-Sep (€,000) 31-Mar (€,000) Investment Properties 438,060 Loans 67,365 68,563 Current Assets 7,318 303,337 Current Liabilities (67,149) (933) Non-Current Liabilities (42,681) Net Assets 402,913 370,966 EPRA NAV per share (cent) 104.7 96.4 Income statement 30-Sep 31-Mar Revenue 5,758 158 Revaluation of inv. properties 18,810 Other gains and losses 10,059 Operating expenses (2,578) (1,159) Other (102) 155 Net income 31,947 (846) Basic and diluted EPS (cent) 8.298 (0.221)

Substantial acquisition capacity following equity issue

8

OPERATING AND FINANCIAL HIGHLIGHTS

Total acquisition capacity of over €550m

Current Financial Capacity €m Net cash as at 30 Sept 3 Net proceeds of placing & open offer 287 RCF repayment (25) Forum acquisition completion (35) Current Cash 230 Existing debt facility 100 Current cash & committed facilities 330 Future Acquisition Capacity €m Incremental new debt capacity @ 40% LTV 360 Future Non-Core Sales 29 Estimated capex: Wyckham, SJR & Windmill Lane (110) Hardwicke and Montague deferred consideration (43) Further incremental acquisition capacity 236

9

Operating and financial highlights

Market update

Portfolio and acquisitions Conclusion and outlook

• 10%
• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6%

• 4%
• 3%
• 2%
• 1%

0% 1% 2% Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Annual (RHS) Quarterly (LHS)

Irish economic backdrop supportive of continued recovery in property market

10

MARKET UPDATE

Irish GDP growth continues to recover post financial crisis Employment growth has picked up PMIs are well into positive territory Recent acceleration in Irish economic recovery

Source: CSO, Goodbody Source: CSO Source: Bloomberg, Markit

Data released since IPO Data released since IPO

• 1.5% GDP growth recorded in Q2 2014



7.7% growth vs. prior year



Government GDP growth forecasts to be revised upwards as a result



Minister of Finance now expecting 4.7% GDP growth for 2014

• Outperformance driven by both domestic demand and growth in

exports

• Revised budget deficit forecast of 3.7% of GDP for 2014



• vs. estimate of 4.8% in April 2014

Source: CSO

40 45 50 55 60 65 May 11 Jul 11 Sep 11 Nov 11 Jan 12 Mar 12 May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13 May 13 Jul 13 Sep 13 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Composite Manufacturing Services

• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% 8%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F

%YoY

420 470 520 570 620 670 720

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Capital value index 200 400 600 800 1,000 1,200 1,400 1,600

1977 1981 1984 1986 1988 1990 1992 1994 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Capital value index

Commercial property market recovering strongly, particularly office sector

11

Commercial property is continuing its recovery Capital values are currently at c.1999 levels Quarterly change in capital values by sector Quarterly change in rents by sector

Source: Jones Lang LaSalle Source: Jones Lang LaSalle Source: IPD Source: IPD

Data released since IPO Data released since IPO

MARKET UPDATE

• 4%
• 2%

0% 2% 4% 6% 8% 10% 12%

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Quarterly change Retail Office Industrial Data released since IPO

• 6%
• 4%
• 2%

0% 2% 4% 6% 8% 10% 12%

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Quarterly change Retail Office Industrial

CBRE forecasting prime rents at c.€60psf by 2020(1)

Rental market: Dublin office dynamics

12

Number of Grade A vacant buildings in Dublin IFSC, 2 and 4

1 2 1 9 1 2 1 2 1 2 3 2 4 6 8 10 12 14

0 - 9,999 sq.ft. 10,000 - 19,999 sq.ft. 20,000 - 29,999 sq.ft. 30,000 - 39,999 sq.ft. 40,000 - 49,999 sq.ft. 50,000 - 59,999 sq.ft. 60,000 - 69,999 sq.ft. 70,000 - 79,999 sq.ft. 80,000 - 89,999 sq.ft. 90,000 - 99,999 sq.ft. 100,000

• 149,999

sq.ft 150,000 sq.ft.+

Only 1 building of >50,000 sq. ft. currently vacant, down from 5 at end of Q2 2013

IFSC Dublin 2 Dublin 4 Source: Jones Lang LaSalle Dublin Office Market Report Q3 2014, (1) CBRE Outlook 2014

MARKET UPDATE

Dublin office take-up expected to be c.2m sq.ft. in 2014

0.0 0.5 1.0 1.5 2.0 2.5 3.0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q3 2014 Million sq.ft. Take Up 20 Year Average

Source: Jones Lang LaSalle

Vacancies reducing and limited new supply

Source: Jones Lang LaSalle Source: Jones Lang LaSalle

Dublin geographic take-up

52% 56% 59% 62% 48% 44% 41% 38% 0% 20% 40% 60% 80% 100% 2011 2012 2013 to Q3 2014 City Centre Suburbs

Source: Jones Lang LaSalle

1 2 3 4 5 10 20 30 40 Q4 2001 Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q3 2014 Million sq.ft. Occupied Stock Vacant Stock Under Construction

Investment market: record transaction levels expected

13

MARKET UPDATE

Source: Jones Lang LaSalle

• Year to date direct property sales of €2.9bn have already achieved 150% of total volume for 2013, when €1.9bn of direct

property was transacted

• Total direct property and loan sales of €5bn expected for 2014
• Large supply pipeline in Q4 2014, with NAMA, Bank of Ireland and Ulster Bank expected to be the most significant sellers

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 € millions Total Investment Volumes Loan Sales Forecast Direct & Loan

Note: Excludes IBRC loan sales of €9.3bn nominal value

Irish property investment market growing strongly

€1.4bn = series average

Opportunities remain within the NAMA portfolio

NAMA loan portfolio: split by geography (Dec-13) NAMA loan portfolio in Dublin: split by type (Dec-13)

DCB = Dublin Commuter Belt Source: NAMA Note: Split of AuM in NAMA portfolio as of 31-Dec-2013 (1) NAMA carrying value of loans (total portfolio) as at 31-Dec-13 (2) NAMA carrying value of loans in Dublin as at 31-Dec-13

Dublin 38% DCB 5% Cork 6% Northern Ireland 4% Galway 2% Limerick 1% Rest of Ireland 4% London 18% Rest of Britain 12% Rest of World 10% Office 24% Retail 18% Industrial 2% Residential 20% Development 15% Land 13% Hotel & Leisure 5% Other 3%

43% of NAMA’s total portfolio is Dublin based Hibernia target sectors

€19.6bn(1) €7.5bn(2)

14

MARKET UPDATE

• In October 2014 NAMA announced that it would bring five Irish property portfolios, with a combined value of approximately

€600m to the market in Q4 2014

• The portfolios will comprise offices, shopping centres, hotels and apartments
• NAMA’s publicly stated intention is to bring property portfolio sales with a minimum value of €250m to the market each

quarter

Other institutions: disposals anticipated

15

Banks Continue to make selective loan and asset sales To materially reduce non-core assets; disposal of £9bn in Irish investment and development loans commenced in February 2014 with €850m sale process for portfolio of commercial loans. Project Aaron on market with par value of c.€6bn. Irish loan book considered non-core; residual value of €3.5bn as of Q2 2014 Other

• Private equity funds, active over last 36 months in Ireland, have become increasingly active in other EU markets and

some are exploring opportunities to exit Irish assets particularly where project management expertise is required

• Selected funds that have been active in Ireland in recent months include:
• JV opportunities – NAMA has confirmed it will engage in JV opportunities with suitable partners, as have some PE

funds, and these opportunities will most likely emerge where project management expertise is required

Total value of commercial property transactions has increased significantly since IPO and is expected to continue; JLL forecasting direct property and commercial loan transactions totalling €5bn in 2014(1)

(1) Source: Jones Lang LaSalle

MARKET UPDATE

16

Operating and financial highlights Market update

Portfolio summary

Conclusion and outlook

Key: Office ; Residential ; Industrial ; Development

Location of Hibernia portfolio

Dublin overview Central Dublin portfolio

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 Source: Google Maps, Visit Dublin, Jones Lang LaSalle

Ballymount

N4/M4 N7/M7

17

1 Wyckham Place 2 New Century House 3 Gateway Site 4 Montague House 5 Hardwicke House 6 Chancery Building and Chancery Apartments 7 Hanover Building 8 Windmill Lane 9 Observatory 10 Guild House 11 Commerzbank House 12 The Forum 13 1-6 SJRQ 14 Cumberland House

3 1

Office properties all within CBD; ex-CBD acquisitions both with good transport links

Croke Park Fairview Park Alexandra Basin River Liffey Herbert Park Kings Inns

• St. Stephens

Green

9 8 7 6 2

12 13

14

2 8 7 6 9 13 12 14 4&5 10&11

4 5 11 10

PORTFOLIO SUMMARY

10.2% €34.2m €60 Yield on cost €408m Dublin CBD office portfolio

Portfolio statistics

18 EPRA portfolio net initial yield as at 30 September 2014 of 4.8%

• excl. acq. costs /

with acq. costs Dublin Residential Dublin CBD Office Development / Refurb 8.2% / 5.7% 28%(3) / 25%(3) 5.7% / 2.9% Whole investment property portfolio As at 30 September 9.6%(3) / 7.1%(3) Latest value €336m(1) €355m(1) €36m €46m €26m €26.7m €438m €45 per sq.ft. 5.5% €16.0m 0.8%(3) €0.3m 0% €0m 7.6% €25.6m 0.8%(3) €0.3m 0% €0m 4.6% €16.8m 5.0% €20.2m 8.5% €28.5m % uplift since acquisition Passing(2) / Contracted(1) Implied yield at illustrative contracted office rents(4) €50 Rent and yield on cost % of total investment property value 100% 81% 6% 11% Dublin Industrial / Logistics Secured loans Total assets today

(1) Assumes full ownership of Hardwicke and Montague and The Forum is a completed acquisition. The Forum completed on 7th November 2014 (2) Pre full ownership of Hardwicke and Montague and post completion of The Forum (3) Includes €1.5m capex spent on Block 3, Wyckham Point since acquisition (4) Current Hibernia Dublin CBD office portfolio average contracted rent of €34 per sq.ft.

0% / -2.9% €10.4m €10.1m 4% €0.5m 4% €0.5m 2% 0% / 0% €68m

• €476m

€505m Purchase price (including cost) 5.8% €19.5m €67m

• PORTFOLIO SUMMARY

15% 15% 12% 11% 11% 6% Rest of tenants 30%

Office portfolio has broad tenant base

Office portfolio statistics Contracted rent by sector

Source: Company information Note: There are three different BNY entities and these are accounted for as one tenant group in the analysis

€19.5m

19

TMT 12% Financial Services 79% Other 9%

€19.5m

Top 6(1) tenants account for c.70% of total contracted office rent

Total contracted

• ffice rent

Total contracted

• ffice rent

Contracted rent by tenant

• Office portfolio has
• ccupancy of over

99%

• Average contracted

rent per sq. ft.: €34

• Weighted average

period to rent review: 2 years

• WAULT to earlier of

expiry or break: 4.4 years

• WAULT to expiry:

9.2 years

• Weighted average

capital cost per sqft at acquisition: €590

PORTFOLIO SUMMARY

Significant development pipeline with planning in place

20

PORTFOLIO SUMMARY

Windmill Lane & Sir John Rogerson’s Quay Sites

• Estimated capex to complete: €25m
• 213 partially completed apartments
• Fit-out work commenced in August 2014
• On track to deliver first completed apartments in Q2

2015

• Project on budget and on schedule to complete by end
• f 2015
• Estimated combined development costs of c. €85m
• Both site with existing planning permission:
• Windmill Lane: 124,838 sq. ft. (net) office space,

9,547 sq. ft. retail & 15 residential units

• SJR: 102,021 sq. ft. (net) office space, 5,360 sq. ft.

retail & 3 residential units

• Site acquired for average of c. €100 per sq. ft. of net

lettable space Block 3, Wyckham Point, Dundrum

21

Operating and financial highlights Market update Portfolio and acquisitions

Conclusion and outlook

Conclusion and outlook

CONCLUSION AND OUTLOOK

 Hibernia has delivered on its strategy since IPO with disciplined

approach to investment

 Considerable opportunity both in existing portfolio and through

further acquisitions

 Hibernia well positioned to take advantage of the opportunity

22

23

24

Appendix

Investment properties cost vs. value analysis

25

30 September 2014 valuations

APPENDIX

Purchase Completion Date Purchase Price €m Purchase Price (include. Costs & Capex) 30/09/2014 Valuation €m % of Investment Properties % increase on Purchase Price (exclude. Costs & Capex) % increase on Purchase Price (include. Costs &capex Dublin CBD Officers New Century House Apr 14 47 48 52 12% 10% 7% The Hanover Building Jun 14 20 21 20 5% 1%

• 3%

Hardwicke & Montague House May 14 60 61 70 16% 17% 14% The Chancery Building Jun 14 16 17 16 4%

• 2%
• 5%

South Dock House Mar 14 5 5 7 1% 38% 35% The Observatory Jul 14 52 53 57 13% 10% 8% Guild and Commerzbank House Jul 14 91 93 96 22% 5% 3% The Forum Nov 14 38 39 38 9% 2%

• 1%

Total Dublin CBD Offices 328 336 355 81% 8% 6% Dublin Residential Block3, Wyckham Point Mar 14 27 30 40 9% 37% 34% Cannon Place Mar 14 7 8 7 2%

• 8%
• 10%

Total Dublin Residential 35 37 46 11% 28% 25% Dublin CDB Office Development/Refurb Windmill Lane Jun 14 8 8 9 2% 16% 13% 1 – 6 SJR Sep 14 18 18 18 4% 1%

• 1%

Total Dublin CBD Office Development/Refurb 25 26 27 6% 6% 3% Industrial Gateway May 14 10 10 10 2% 0%

• 3%

Total Investment Properties 398 409 438 100% 9.6% 7.1%

APPENDIX

Wyckham Point – Dundrum, Dublin 16 Off-mkt Loan

• Dev. opportunity

Acquisition type

 

Property type

• Acquired as part of €67m Dorville loan portfolio
• Apportioned cost of c. €27m
• Comprises:

–

Wyckham Point – 213 partially completed apartments

–

Mix of one, two and three bed apartments

–

Excellent amenities incl. 3 acre park with lake, gym, creche

• Prime south Dublin residential location

–

Good transport links

–

Close to Dundrum Shopping Centre

• Estimated cost to complete: less than €25m
• Building contractor on site



Infill Good transport links

Residential

 

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Stage 1 - Pre Construction Stage 2 - Construction Stage 3 - Turn-key fit-out

Wyckham Point planned timeline to complete

Detailed portfolio profiles

Summary of Dorville portfolio loan acquisition

• Off–market acquisition of €67m Dorville loan portfolio from Ulster

Bank

• Purchase price of €67m vs. par value of €151m
• Gaining access to a portfolio of 16 assets, principally residential
• Hibernia

to retain three “core” assets and undertake phased disposal of the other assets

Core assets Ascribed cost Wyckham Point Residential €27m Cannon Place Residential €6m South Dock House Office €5m €38m Non core assets Ascribed cost 8 residential assets €20m 2 office assets €2m 3 development assets €7m €29m 26

27

APPENDIX

Detailed portfolio profiles

Cannon Place – Herbert Road, Dublin 4

• Acquired as part of €67m Dorville loan portfolio and €2.4m

BH loan portfolio

• Apportioned cost of €6m (Dorville) and €1.7m (BH)
• Comprises an entire 16 unit apartment block of two and three-bed
• apartments. 22 units in entire scheme
• Well-located modern estate

–

Walking distance from Sandymount and Ballsbridge villages

–

Close to Lansdowne DART station and the Aviva Stadium Off-mkt Loan Acquisition type



Property type Good transport links

Residential



South Dock House – 1st Floor Offices, Hanover Quay, Dublin 2 Off-mkt Loan Acquisition type



Property type

• Acquired as part of €67m Dorville loan portfolio
• Apportioned cost of c.€5m, equating to €530psf capital value
• Asset comprises

–

One floor of 8,955 sq ft in three office suites with parking for 10 cars

–

Let to 3 tenants / sub-tenants (Open Hydro Ireland, Collins Stewart, Guggenheim Partners)

–

Passing rent of €308k, average of €34psf

–

WAULT: 2 years to break, 5 years to expiry Grade A CBD Income producing

Office

    

APPENDIX

New Century House – Mayor Street, IFSC Dublin 1 Off-mkt Property Acquisition type

 

• Acquisition price €47m: equating to €587psf capital value
• Asset comprises

–

79,750 sq ft office, 6,202 sq ft storage offices over six storeys with parking for 87 cars

–

Let to Bank of Ireland on FRI lease until 2024, with upward-

• nly rent review in 2019

–

Contracted rent €2.85m, or €32psf following expiry of rental abatement in October 2015

–

Passing rent €1.85m until expiry of rental abatement in October 2015

–

NIY on cost (on contracted rent): c.6%

• Significant refurbishment work is about to be implemented by

the tenant Property type Grade A CBD Income producing Value-add space

Office

   

Detailed portfolio profiles

Off-mkt Loan Acquisition type



Property type Grade A CBD Income producing

Office

  

• Acquisition price: €60m, equating to €678psf capital value
• Acquisition from Hardwicke Group in partially deferred transaction

structure

–

Initial acquisition of €18.25m of loans (giving operational control) with NIY on cost of 7.7%

–

Right to take full ownership of the buildings any time up to mid- 2016 for incremental €41.75m

• Assets comprise

–

88,493 sq ft of prime Grade A office space in two 5 storey buildings on contiguous back-to-back sites with 56 basement car parking spaces

–

Both multi-let at avg passing rent of €30psf (Hardwicke €34psf, Montague €27psf)

–

WAULT of 7 years to break 10 years to expiry

–

100% of rent to be reviewed during or prior to 2018

–

28% with break clauses in 2016 Montague House & Hardwicke House – Hatch Street Upper & Adelaide Road, Dublin 2



28

29

APPENDIX

Gateway Site – Newlands Cross, Naas Road, Dublin 12 On-mkt Property

• Dev. opportunity

Acquisition type

 

Property type

• Acquisition price: €10.1m
• Comprises

–

14.1 acres (5.71 ha) with three large industrial/logistics facilities of 178,330 sq. ft.

–

Buildings currently 60% occupied and producing a passing rental income of €0.5m or c.€5.0psf

–

Current NIY on cost c.5%

• Strategic location adjacent to intersection of Ireland’s two busiest

roads and Dublin’s light rail system

• Significant redevelopment potential

Prime location Good transport links

Industrial

 

Detailed portfolio profiles

Chancery Building - Chancery Lane, Dublin 8 Off-mkt Loan Acquisition type



Property type

• Acquisition price: €16m
• Assets comprise

–

a) office building with 33,799 sq. ft. space over 6 stories with 19 parking spaces

–

Allocated price of €15m for the offices equates to cap.

• val. of €445psf

–

Fully let with WAULT of 8.7 years to expiry and 1.7 years to break

–

Average contracted rent of €30psf

–

NIY on cost 6.8%

–

b) four 2 bed apartments in same building with separate entrance

–

Fully let on 1 year contracts

–

Allocated price of €1m for the apartments equates to a NIY on cost of 6.1% Grade A CBD Income producing

Office

    

30

APPENDIX

The Hanover Building – Windmill Lane, Dublin 2 Off-mkt Loan

• Dev. opportunity

Acquisition type



Property type CBD Income producing Value-add space

Office

  

• Acquisition price: €20.2m, equating to €410psf cap. val. in

respect of the offices, €130psf cap. val. in respect of the retail and 7.3% NIY on cost

• Asset comprises 5 storey building and 13 underground parking

spaces with:

–

a) 44,317 sq ft of office space on upper floors

–

Fully let to BNY under leases running to 2026/27 with break clause in 2016

–

Average contracted rent on office space of €30psf

–

b) 11,614 sq ft of retail space on ground floor, 3,649 sq ft in basement

–

Fully let to Eurospar to 2032 with break clause in 2019

–

Office and retail income all subject to rent reviews in 2016 and 2017

• South Docks area one of most popular office locations

in recent years

• Adjoins the 1 acre Windmill Lane Site and behind The

Observatory Building and 1-6 SJR all acquired in separate transactions



Detailed portfolio profiles

Windmill Lane Site – Windmill Lane, Dublin 2 Off-mkt Property

• Dev. opportunity

Acquisition type



Property type



CBD Value-add space

Office

 

• Acquisition price: €7.5m
• One acre development site adjoining Hanover Building in South

Docks area

• Existing planning consent for:

–

124,838 sq ft (net) office space

–

9,547 sq ft retail

–

15 residential units

• Price paid for land equates to €50psf on the net developable space
• 12 month option to the vendor to invest on a side by side, equal

cost basis on the redevelopment of the Hanover Building and the Windmill Lane Site

 

31

APPENDIX

The Observatory Building – Sir John Rogerson’s Quay, Dublin 2 On-mkt Property Acquisition type



Property type



Grade A CBD Income producing

Office

  

• Acquisition price €51.5m
• Asset comprises

–

a) 84,726 sq ft office over six storeys with parking for 47 cars

– Allocated price of €49.8m for the offices equates to €590

psft.

– 95% let with WAULT of 10.9 years to term and 3.7 years to

break

– Tenants include Riot Games, Publicis, Morgan Stanley &

Realex Payments

– Low average contracted rent of €26psf – Annual contracted rent of €2.2m, with rent frees on €1.2m

ending in 2015 and 2016

–

b) Eight partially completed 2 bed “live / work” units and two retail units

– Allocated price of €1.7m

• NIY on cost (post-rent free periods): c.4.1%

Detailed portfolio profiles

Guild & Commerzbank House – Guild Street, IFSC, Dublin 1 Off-mkt Property Acquisition type



Property type



Grade A CBD Income producing

Office

 

• Acquisition price €90.75m
• Purchase of two adjoining buildings in the IFSC. The buildings

comprise:

–

144,250 sq. ft. of office accommodation over five storeys with parking for 148 cars

– €629 psft. – 100% let with WAULT of 2.8 years to break and 7 years to

expiry

– Tenants include FBD Holding Ltd, BNY Mellon and Commerz

Management Services

– Average contracted rent of €39psf – Annual passing rent of €6.1m – NIY on cost: 6.6%



APPENDIX

Detailed portfolio profiles

The Forum Building – Commons Street, IFSC, Dublin 1

• Acquisition price: €37.8m(1)
• Asset comprises

–

a) 47,109 sq. ft. of office accommodation over two floors

–

Fully let to Depfa Bank under leases running to 2029 with break clauses in 2019

–

Average contracted rent on office space of €40psf

–

b) 370 parking spaces (over four floors)

–

50 parking spaces used by Depfa Bank as part of their lease

–

320 parking spaces utilised by Park Rite paying €675,000 per annum on a lease that has formally

• expired. Discussions ongoing with Park Rite
• Acquisition price reflects a NIY on cost of 7.0% and capital value of

€550 per sq. ft. for the office space and €32,883 per parking space Off-mkt Property Acquisition type

 

Grade A CBD Income producing

Office

Property type

  

1 – 6 Sir John Rogerson’s Quay, Dublin 2

• Acquisition price: €17.75m
• 0.75 acre development site located in South Docks area
• This site is located adjacent to The Observatory Building. Hibernia’s

Hanover Building and Windmill Lane Site are located immediately behind this site

• Existing planning consent for:

–

102,021 sq. ft. (net) office space

–

5,360 sq. ft. retail

–

3 residential units

–

34 parking spaces

• Price paid for land equates to €150psf on the net lettable space

Off-mkt Property

• Dev. opportunity

Acquisition type

  

Grade A CBD Value-add space

Office

Property type

 

(1) Transaction not yet completed. Purchase due to complete on 7 November 2014

32

33

APPENDIX

Detailed portfolio profiles

Cumberland House, Dublin 2 Off-mkt Loan

• Dev. opportunity

Acquisition type



Property type CBD Value-add space

Office

 

• Loan Facility Amount: €38m
• On 26 August 2014, facility made available to Morretino Ltd

secured on Cumberland House

• Continue to explore option to gain a direct interest in Cumberland

House

• Cumberland House is:
• Prominent seven story office building of c. 112,000 sq. ft. (and

210 parking spaces) constructed in 1977

• On a 1.65 acre site with development potential
• Existing planning consent for:
• 250,000 sq ft (net) office space on a multi let basis
• 268,000 sq ft (net) office space on a single let basis
• Located

close to Merrion Square, Government Buildings, Trinity College and one of Dublin’s busiest commuter stations, Pearse Street

 

Dublin residential market also showing strong growth from depressed levels

34

Residential prices now growing across the country Average residential property prices

Source: CSO Source: ptsb/ESRI, CSO, Goodbody

Data released since IPO Data released since IPO

APPENDIX

Capital values in Dublin continue to recover strongly & rental values up 10%(1) in year to June 2014

(1) Source: Private Residential Tenancy Board

• 30%
• 20%
• 10%

0% 10% 20% 30% Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 % YoY Dublin Ex Dublin 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 Dublin Ex Dublin

Indicative key Investment Manager Agreement terms

• Management fees(1)

–

Scaling fee for invested EPRA NAV paid quarterly in three tranches:

–

On invested EPRA NAV up to €450m, 0.25% of invested EPRA NAV (quarterly payment)

–

On incremental invested EPRA NAV above €450m but below €600m, 0.2% of invested EPRA NAV (quarterly payment)

–

On incremental invested EPRA NAV above €600m, 0.15% of invested EPRA NAV (quarterly payment)

–

For uninvested proceeds, 0.125% of total balance (paid quarterly)

• Performance fees(2)

–

Calculated annually on both an absolute and a relative basis. Each basis has a 50% weighting in the overall performance fee (i.e. fees calculated separately on a 100% basis and then halved)

–

Absolute basis (50% of total): calculated based on outperformance of the following hurdle rates:

–

15% fee of EPRA NAV total return(3) above 10% hurdle, and

–

20% fee of EPRA NAV total return(3) above 15% hurdle

–

Hurdle resets annually based on closing EPRA NAV and is subject to a high watermark

–

Relative basis (50% of total): calculated based on outperformance benchmarked against the IPD Ireland index:

–

30% fee of total annual property return (increase in gross asset value plus rental income)(4) above IPD Ireland index hurdle

–

Hurdle resets annually based on IPD Ireland returns and is subject to a rolling IPD Ireland-driven high watermark

–

All performance fees paid through the issue of shares, subject to a staggered 3-year lock-up release, with 1/3rd released after the first, second and third anniversaries of the financial reporting year-end

–

Lock-up release will be temporarily suspended if EPRA NAV falls below the gross IPO proceeds

• Management contract

–

5 years (from IPO in Dec-13), following which automatically extended on a rolling 3 year basis unless terminated

–

12 month notice period applicable to Hibernia REIT and Investment Manager (earliest termination is at end of initial 5 year period)

–

Key person termination rights to be included

• Conflicts

–

Hibernia REIT to have first refusal on all property investments offered to W.K. Nowlan & Associates

–

Manager employees will not be involved in a similar vehicle without Board approval

–

Manager employees will not advise any investor in competition with Hibernia REIT

–

All conflicts of interest to be disclosed to Hibernia REIT

(1): Management fee calculated by reference to EPRA NAV at the end of each quarter (2) For both management and performance fees, intra-year acquisitions and disposals of property will be assumed to have taken place on the first day of the financial year in which the acquisition/disposal occurred (3): EPRA NAV total return = EPRA NAV increase + dividends declared for year, adjusted to exclude effects of any share issues. (4): Calculation excludes proceeds that have not yet been invested (i.e. calculated on value of property assets only until fully invested)

APPENDIX

35

Overview of the Irish REIT regime

36

APPENDIX

Summary of Irish REIT regime Established

• Introduced by Finance Act 2013

Legal form

• Irish incorporated PLC company with an allotted share capital of not less than €38,092

Shareholder requirements

• No closely held company; 10% threshold for corporate shareholders

Listing requirements

• Listed on the main market of a stock exchange in an EU Member State

Business restrictions

• >75% of aggregate income derived from property rental business
• >75% of portfolio market value must relate to property rental business
• Within 3 years of commencement, the REIT must hold at least 3 separate assets, none of which having a market value >40%
• f total portfolio
• Irish and non-Irish assets
• Authorised sectors: commercial properties, industrial properties, residential properties

Leverage restrictions

• Profit financing ratio of at least 1.25 : 1
• Profit financing ratio = property income plus property finance costs divided by property finance costs

Tax

• Tax exemption for certain income from property rental business, 12.5% for non property rental income
• Tax exemption for capital gains, 33.0% for non property rental assets
• Dividend withholding tax of 20.0%
• Irish stamp duty of 1.0% apply to the purchase of shares in a REIT

Distribution requirements

• Property income: 85%
• Capital gains: no distribution obligation

Summary of Irish REIT regime

Source: European Public Real Estate Association

Highly experienced management team…

37

WK Nowlan REIT Management

Breadth of skill set and experience encompassing institutional property management and development in prime and value add space, with strong relationships with key decision makers in banking and property

Kevin Nowlan Chief Executive Officer Bill Nowlan Investment Director Frank Kenny Development Director Frank O’Neill Chief Operations Officer >20 years of experience in the Irish property market Previous positions include Senior Portfolio Manager at NAMA, Portfolio Manager at Treasury Holdings and Assistant Manager at Anglo-Irish Bank plc >40 years of experience advising on investment in Irish commercial property Previously Head of Property Investment

• f Irish Life from 1985

to 1995, the largest property fund manager in Ireland. Established WK Nowlan in 1995, one

• f the largest property

asset managers in Ireland >35 years of experience in the Irish and US property markets Founder and CEO of Willett Companies LLC, boutique investment company which managed, developed and/or

• wned 2 million sq ft
• f real estate

>20 years of experience in the Irish property market Previously, manager

• f WK Nowlan

Property Management Division, covering Irish and UK properties Tom Edwards- Moss Chief Financial Officer Previously worked for 9 years at Credit Suisse in the Investment Banking Division with a particular focus on corporate finance in the real estate sector Qualified as a Chartered Accountant at PwC in 2005 Richard Ball Chief Investment Officer >7 years of experience in the Irish property market Previous senior positions within Clancourt Group and Michael McNamara & Company Spent three years working in corporate finance with BDO where he qualified as a Chartered Accountant

APPENDIX

…with overview from a highly qualified Board and supported by WK Nowlan

38

Governance

Hibernia REIT plc

• WK Nowlan is a property asset management company staffed by 26 full time property, financial and support staff
• Team has a broad mix of skills covering all the key professional aspects of property management and development:

surveyors and valuers, architects, engineers, portfolio managers and financial analysts

• Capacity to execute multiple transactions simultaneously
• Ability to manage complex commercial and residential projects
• Selected clients include:

Support

WK Nowlan Property

Danny Kitchen Non-Executive Chairman Stewart Harrington Independent Non-Executive Director Terence O’Rourke Independent Non-Executive Director Colm Barrington Independent Non-Executive Director Non-Executive Chairman of Workspace Group plc and Non-Executive Director of LXB Retail Properties plc Previously Finance Director of Green Property plc Non-Executive Director

• f BWG Group and

Stafford Holdings and Director of Killeen Properties Previously a Partner Jones Lang Wootton (now Jones Lang LaSalle) Founding Partner of Harrington Bannon Chartered Surveyors Non-Executive Director of The Irish Times and Chairman of Enterprise Ireland Non-Executive Chairman of Aer Lingus plc, Senior Independent Director of IFG Group plc and CEO & Director

• f Fly Leasing Ltd

Previously MD of Babcock and Brown in Ireland Bill Nowlan Non- Executive Director Previously Head of Property Investment of Irish Life from 1985 to 1995, the largest property fund manager in Ireland Previously a board member of the Chartered Accountants Regulatory Board and Managing Partner of KPMG Ireland

APPENDIX