Interim Results November 2017 1 Disclaimer This presentation - - PowerPoint PPT Presentation

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Interim Results November 2017 1 Disclaimer This presentation - - PowerPoint PPT Presentation

Interim Results November 2017 1 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


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SLIDE 1

Interim Results

November 2017

1

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SLIDE 2

2 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.

Disclaimer

Pictured on cover: 1SJRQ under development, Windmill Quarter

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SLIDE 3

3

Market update Developments Portfolio management Highlights Conclusion and outlook Financial results

Agenda

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SLIDE 4

4

(1) Net of capex and acquisitions (2) Stamp duty on commercial property transactions increased from 2% to 6% in Budget 2018 effective 11 Oct 17 (3) Prior year comparison excl. the surrender premium of €4.9m received from a previous tenant in 2015

Results summary

6 months to Sept-17 6 months to Sept-16 Portfolio value(1) Net of stamp duty increase(1,2) +5.2% +0.8% +2.4% Total property return (“TPR”) +7.2% +4.5% TPR vs. IPD Ireland Index +2.4%

  • 0.8%

EPRA NAV per share Net of stamp duty increase(2) +6.2% +0.8% +2.9% EPRA Earnings +13.1% +54.4%(3)

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SLIDE 5
  • Continued progress with development pipeline

– 1WML and 2DC(1) completed – 1SJRQ and Hanover Building (renamed 2WML) on track for 2018 completions – Working to refine near and longer term pipeline of five schemes

  • New lettings increasing income and WAULT of portfolio, with further to go

– Contracted rent roll of €49.5m(2), +7% since Sept-16 — Letting of committed developments plus remainder of 1WML expected to add c.€15m — Acquired in-place offices reversionary potential c.€6m (avg. 2.9yrs to review/expiry) – WAULT to break of in-place offices now 6.9yrs, +17% since Sept-16

  • Strong balance sheet with undrawn facilities available

– Net debt of €181m, LTV 14.3% – Cash and undrawn facilities of €150m net of committed capex and planned repayment of 1WML facility

  • Growing dividend

– 1.1c per share, +47% on prior year

5

Business highlights

(1) 2DC completed post 30-Sept-17 (2) Contracted rent incl. net residential rent and excl. Iconic Offices arrangement in Clanwilliam

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SLIDE 6

6

  • Strong demand for office space in Dublin

– Broad based growth in Irish economy – Continued FDI in Dublin – Brexit moves starting to be seen

  • Still plenty to come from portfolio in near term

– Two committed schemes delivering 174k sq. ft. of offices in next 12 months – Likely to start 50k sq. ft. office scheme at Cumberland Place in 2018 – Acquired in-place portfolio is 23% reversionary and has 2.9yrs to review/expiry

  • Exciting longer term development pipeline

– Four schemes with potential to add up to 336k sq. ft. net new office space – 49% planning approved: working to refine and improve schemes

  • Expect to recycle capital into new opportunities
  • Hibernia well positioned

– Talented team with clear strategy – Cash and undrawn facilities of €150m(1)

Looking ahead

(1) Net of committed capex and planned repayment of 1WML facility

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SLIDE 7

7

Market update Developments Portfolio management Highlights Conclusion and outlook Financial results

Agenda

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SLIDE 8

(€ ’ 000)

30-Sept-17 31-Mar-17 % change Portfolio value 1,211,927 1,167,387 4% Net debt 180,972 155,257 17% Loan to value 14.9% 13.3% 12% Net assets 1,025,364 1,013,852 1% EPRA NAV per share (cents) 147.5c 146.3c 1%

(€ ’ 000)

6 months to 30-Sept-17 6 months to 30-Sept-16 % change Net rental income 21,864 16,686 31% Revaluation gain 7,946 24,342

  • 67%

Net profit 16,924 32,296

  • 48%

EPRA earnings 9,024 7,981 13% EPRA EPS 1.3c 1.2c 8% Interim dividend per share 1.1c 0.75c 47%

(€ ’ 000)

30-Sept-17 31-Mar-17 % change Portfolio value 1,265,607 1,167,387 8% Net debt 180,972 155,257 17% Loan to value 14.3% 13.3% 8% Net assets 1,079,044 1,013,852 6% EPRA NAV per share (cents) 155.3c 146.3c 6%

8

Strong performance in the period: stamp duty impact post period end

Financial highlights

(1) Stamp duty on commercial property transactions increased from 2% to 6% in Budget 2018 effective 11 Oct 17 (2) Including capex & acquisitions (2)

Balance sheet at 30 Sept 17 Proforma balance sheet incl. stamp duty change(1)

(2)

Income statement for 6 months to 30 Sept 17 Proforma income statement incl. stamp duty change(1)

(€ ’ 000)

6 months to 30-Sept-17 6 months to 30-Sep-16 % change Net rental income 21,864 16,686 31% Revaluation gain 61,626 24,342 153% Net profit 70,604 32,296 119% EPRA earnings 9,024 7,981 13% EPRA EPS 1.3c 1.2c 8% Interim dividend per share 1.1c 0.75c 47%

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SLIDE 9

146.3c 155.3c 147.5c 1.3c (1.5c) 0.2c (7.8c) 140 142 144 146 148 150 152 154 156 158 160 Mar-17 Investment properties reval. Development properties reval. EPRA earnings Dividends paid Other Sept-17

  • Est. stamp duty

impact Sept-17 (proforma incl. stamp duty) EPRA NAV cent per share +6% +1%

Traditional Core IFSC South Docks 1WML 1SJRQ

Valuation uplift: 9.0c

Other(2)

Like-for-like in-place office valuation: +4.9%(3) (c.80% yield impact)

Other(1)

9

EPRA NAV per share movement since 31 March 17

(1) Residential/Other (2) 2WML (3) Represents €30m of the net property valuation uplift in the period. Excl. 2DC, Clanwilliam, Marine & Harcourt on the basis that capex was spent on the property or the valuation assumptions changed during the period

2.6c 6.4c

Strong uplift in EPRA NAV per share in period to Sept 17: stamp duty impact post period end

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SLIDE 10

€7,981 €9,024 €4,015 €1,250 (€2,401 ) (€360 ) (€1,461 ) €0 €2,000 €4,000 €6,000 €8,000 €10,000 €12,000 €14,000 €16,000 €18,000 €20,000 Sept-16 New lettings

  • n completed

developments In-place lease events/acquisitions Admin costs Finance costs (net) Other Sept-17 EPRA earnings ‘000

+13%

10

EPRA earnings movement since 30 Sept 16

Performance related pay (€2,179) Other admin (€222)

Uplift in EPRA earnings since 30 Sept 16 (€’000)

Fair value loss on shares issued (€1,082) Other gains(1) (€379) Acquisitions in prior year €1,160 Lease renewals/rent reviews €1,555 Lease expiries & other (€1,465)

(1) Dev. mgmt. fees earned and gains on non core asset disposals that arose in the prior year

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SLIDE 11

Net cash invested €839m Net equity raised €658m Committed capex €69m RCF €400m Remaining inv. capacity

  • excl. 1WML debt

€150m 1WML Debt €44m €44m €0m €200m €400m €600m €800m €1000m €1200m Uses of funds Sources of funds

11

Current LTV of 14.3%: if RCF fully invested, LTV would be 27.0%(3,4)

Substantial financial capacity in place

(1) €100m hedged from Nov 16 to Nov 20. A further €50m hedged from Nov 17 to Nov 21, rising to €100m from Feb 18. 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 is 3M Euribor) (3)

  • Excl. 1WML facility

(4) Including the estimated impact of the stamp duty change, LTV would be 14.9% and 28.0% if RCF was fully invested (excl 1WML facility)

Hedged €200m(1) Hedged €44m(2) Net debt €181m

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SLIDE 12

€34m €19m €14m €25m €19m €6m €16m €1m €10m 13% 17% 20% 0% 5% 10% 15% 20% 25% €0m €10m €20m €30m €40m €50m €60m €70m To March 2017 (A) Y/E March 2018 (F) Y/E March 2019 (F) Expected LTV (%) €m of capital expenditure 1WML 1SJRQ 2WML (Hanover Building) Two Dockland Central LTV (RHS)

Spent in 6mths to Sept 17: 2DC: €5m 2WML €1m 1SJRQ €7m 1WML €13m Total €26m

12

Forecast capital expenditure and LTV(1) for committed development schemes

(1) Forecast LTV based on valuers’ estimates of GDV at Sept-17 and includes the impact of stamp duty change (2) Hibernia est. all in cost of 1WML on 100% basis is €77m (i.e. €24m all-in land cost (see slide 14) plus €53m total capex). In the prior year, Hibernia’s financial accounts show that the cost of acquiring 100% of 1WML was €36m which incl. the vendor’s 50% share of capex spent to date of acquisition of €13m. There was c.€28m of capex remaining (based on est. total capex of €53m) to be spent at date of acquisition. Therefore, the total cost

  • f the project is €77m (€36m + €28m + €13m = €77m)

(3) €9.4m net of dilapidations received

Completed scheme

Project

  • Est. total capex

€m Spent at Sept-17 €m Left to spend €m 1WML €53m €47m €6m Two Dockland Central €11m €6m €5m 1SJRQ €58m €21m €37m 2WML (Hanover Building) €22m €1m €21m Total committed €144m €75m €69m Maintenance capex €2m Total committed incl. maintenance capex €144m €77m €69m

Forecast capital expenditure by financial year – committed developments

(3) (2)

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SLIDE 13

(1)

  • Excl. Iconic Offices arrangement in Brickhouse (Clanwilliam Court, Block 1). Incl. net residential rent

(2)

  • Excl. Camden St., 1WML and space occupied by Hibernia in South Dock House. Incl. vacant parking at valuers’ ERV

(3)

  • Incl. 1WML which completed Aug-17

(4) At valuers’ ERV 30 Sept 17

13

Significant uplift in rent roll expected from committed developments and asset management

Potential incremental rent roll from committed developments and rent reversion

€3.5m €2.3m €6.5m €4.0m €3.2m €1.0m €2.0m

€15m €25m €35m €45m €55m €65m €75m Contracted in-place rent roll at 30 Sept 17 Let To let

€64.2m +€17.0m +36% €72m +€24.8m +53% €0.8m currently under review

In-place office reversion(1,3)

Potential incremental rent roll c.€6m

Vacant space(2)

2DC 1SJRQ 1WML Total contracted rent: €49.5m(1) 2WML

Total potential rent roll(4)

Committed(3) 1WML 2DC Vacant space(2)

Based on Cushman & Wakefield (C&W) estimated rental values, Sept 17

Average office ERVs of ‘To let’ space as per C&W Sept 17:

  • 1SJRQ:

€54.58psf (ground floor and above only)

  • 2DC:

€49.68psf

  • 2WML:

€51.23psf (office only)

  • 1WML:

€51.51psf (€52.25psf excl. Pinsent Masons). Office area only.

€47.2m

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SLIDE 14

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Scheme Area post completion (sq. ft.) Purchase price (incl. costs) (€m)

  • Est. total

capex (€m) Capex to spend at Sept- 17 (€m) ERV(2) €m Office(3) (To Let) €psf 1WML Office: Retail/Reception: 124k 15k €24m(4) €53m(4) €6m €7.5m(5) €52.25 1SJRQ Office: Retail/Café/Amenity: 115k 5k €18m €58m €37m €6.5m €54.58 2WML Office: Gym: 59k 12k €21m €22m €21m €3.2m €51.23 2DC Office: 73k(6) €46m €11m(7) €5m €4.0m(6) €49.68 Total Office: Other: 371k(6) 32k €109m €144m(8) €69m €21.2m Sensitivity of development profits to come from committed schemes (excl. 2DC)(9) Yield 5.50% 5.25% 5.00% 4.81% 4.50% 4.25% 4.00%

  • Avg. ERV

€47.50psf (€10m) (€2m) €8m €16m €30m €43m €58m €50.00psf (€1m) €8m €18m €26m €41m €55m €70m €52.50psf €8m €17m €28m €37m €52m €67m €83m €53.16psf €10m €20m €30m €39m €55m €70m €86m €55.00psf €17m €27m €38m €47m €64m €79m €96m €57.50psf €26m €36m €48m €57m €75m €91m €108m €60.00psf €35m €46m €58m €68m €86m €102m €121m €62.50psf €44m €55m €68m €78m €97m €114m €134m €65.00psf €53m €65m €78m €89m €108m €126m €146m

Profit left to come based on valuers’ current yields/ERVs

(1) Assuming valuers’ estimate of GDV at Sept-17 (2) Per valuers’ ERV at Sept-17 average (3) Office areas only (4) Refer to footnote (2) on slide 12 (5)

  • Incl. net residential rent at valuers’ ERV at Sept-17

(6) 57k sq. ft. of entire 2DC (73k sq. ft.) is refurbished space. ERV for refurbished space only is €3.1m (7) €9.4m net of dilaps (8) €142.4m net of dilaps (9) At 30 Sept 2017 C&W, the independent valuer, had an average estimated rental value for the unlet office space (227,000 sq. ft.) in 1WML, 1SJRQ and 2WML of €53.16psf and were assuming an average yield of 4.81% upon completion: based on these assumptions they expect a further c. €39m of development profit (ex. finance costs) to be realised through the completion and letting of the unlet space in these schemes.

Potential profits to come from committed and recently completed schemes(1)

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SLIDE 15

15

  • Strong performance in the six months, driven by yield compression and developments

– EPRA NAVPS +6.2% to 155.3c – TPR of 7.2% vs IPD Ireland Index of 4.8% relative performance fee accrual of c.€1.9m(1)

  • Impact on Hibernia of stamp duty increase magnified by development assets

– Proforma portfolio valuations -4.2% (offices -4.7%) vs. -3.7% for a “dry” commercial asset – Residual appraisals on developments factor in stamp duty on GDV and on current site value: double count unwinds on completion of development

  • Interim dividend increased by 47% to 1.1c

– Represents 50% of dividends paid in respect of prior year

  • Significant financial capacity remains in place

– LTV of 14.3% – Cash and undrawn facilities of €150m net of committed capex and planned repayment of 1WML facility

Key financial messages

(1) Factoring in stamp duty impact

Future valuation gains likely to be driven by developments and asset management and consequently “lumpy”

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SLIDE 16

16

Market update

Developments Portfolio management Highlights Conclusion and outlook Financial results

Agenda

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SLIDE 17

Source: CSO, Goodbody *excl. R&D and aircraft leasing

4% 6% 8% 10% 12% 14% 16% 1.8m 1.9m 2.0m 2.1m 2.2m 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(f) 2018(f) 2019(f) 2020(f) Numbers in employment (LHS) Unemployment rate (RHS)

17 Irish economic growth remains robust… FDI job growth a key driver and concentrated in Dublin*

2007 peak employment = 2.2m 2012 peak unemployment = 15.2%

Economic outlook

Source: CSO/EY/Oxford Economics/European Commission Source: CSO/Goodbody * Source: IDA Ireland/Davy – c.50% of FDI jobs announced in last 3yrs have been in Dublin

Irish core domestic demand about to reach pre-crisis levels Strong employment fundamentals expected to persist…

Source: CSO/Goodbody

2014 2015 2016 2017F 2018f 2019f Consumption 2.0% 4.2% 3.3% 2.5% 2.9% 2.7% Government 4.8% 1.8% 5.3% 2.3% 2.0% 2.0% Investment 18.1% 27.9% 61.2%

  • 14.8%

6.1% 4.8% Core Investment* 13.2% 10.6% 13.6% 9.9% 11.1% 7.9% Domestic Demand 6.3% 10.1% 21.4%

  • 4.6%

4.0% 3.4% Core Domestic Demand 4.2% 4.8% 5.4% 3.8% 4.3% 3.6% GDP 8.3% 25.6% 5.1% 5.5% 5.1% 3.1%

100bn 120bn 140bn 160bn 180bn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Actual Peak Projected

  • 15%
  • 10%
  • 5%

0% 5% 10% 2008 2009 2010 2011 2012 2013 2014 2015 2016

% Y-o-Y growth

FDI-related Non-FDI Total

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SLIDE 18

Other 21% Professional services 14% TMT 24% Financial services 13% Public sector 4% Undisclosed 24% < 5k sq. ft. 13% 5k - 10k sq. ft. 17% 10k - 20k sq. ft. 16% 20k - 50k sq. ft. 25% 50k - 100k sq. ft. 15% >100k sq. ft. 14% 0% 2% 4% 6% 8% 10% 12% 14% Overall vacancy rate Grade A vacancy rate Other 10% Professional services 9% TMT 24% Financial services 8% Public sector 10% Undisclosed 39% 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 2016 2017 YTD Millions Sq Ft Annual Dublin office take up 10 Year Average

18 Almost 50% of take-up* is less than 20k sq. ft. Active demand strong at present

Prime Grade A rents now €63.50psf with broad-based demand

Active demand @ Oct 17: 4.4m sq. ft. Active demand @ Mar 17: 3.8m sq. ft.

Rental market: Dublin office dynamics

Overall Dublin vacancy rate now 6.2% with the grade A vacancy rate at 2.6% in D2/4 (core CBD location) 2017 expected to be close to a record year for take-up

Source: CBRE @ 30 Sept 17 Source: CBRE @ 30 Sept 17 *total gross take-up over the period Q1 2011 to Q3 2017 Source: CBRE @ 30 Sept 17 Source: Cushman & Wakefield/Hibernia

Total

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SLIDE 19

19

City centre development remains controlled: suburban supply may increase

Expected Dublin office development and refurbishment supply

Source: CBRE/Hibernia

Dublin CBD office development pipeline Total Dublin office development pipeline (incl. suburbs)

  • Hib. all potential schemes

Pre-let/let Under construction Completed Probability weighted pipeline

0.2m 1.1m 1.9m 2.0m 1.3m 2.4m 0.0m 0.5m 1.0m 1.5m 2.0m 2.5m 3.0m 3.5m 4.0m 2015 (A) 2016 (A) 2017 (F) 2018 (F) 2019 (F) 2020 (F) Potential sq. ft. Expected year of completion

CBRE 2016 take-up = 2.6m sq. ft. CBRE 10yr avg. take- up = 1.9m sq. ft.

0.2m 1.0m 1.2m 1.6m 1.2m 1.4m 0.0m 0.5m 1.0m 1.5m 2.0m 2.5m 3.0m 3.5m 4.0m 2015 (A) 2016 (A) 2017 (F) 2018 (F) 2019 (F) 2020 (F) Potential sq. ft. Expected year of completion

CBRE 10yr avg. take- up = 1.3m sq. ft. CBRE 2016 take-up = 2.0m sq. ft.

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SLIDE 20

4.25%

2% 3% 4% 5% 6%

20 Select Brexit movers & reported possible movers Investment volumes trending down towards long run avgs.

Investment volumes expected to return towards long term trend

€0.0bn €1.0bn €2.0bn €3.0bn €4.0bn €5.0bn €6.0bn 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017 Office Retail Mixed use Industrial Residential Other Recent active funds

  • 5%

0% 5% 10% 15% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Prime Dublin office yields Ireland 10yr Government bond yield German 10yr Government bond yield

350bps

Investment market update

Real estate yields attractive relative to bonds Dublin prime office yields in a European context

Source: CBRE @ Sept 17 Source: CBRE/Bloomberg LP @ Sept 17 Source: CBRE @ Sept 17

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SLIDE 21

21

Market update Developments Portfolio management Highlights Conclusion and outlook Financial results

Agenda

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SLIDE 22

22

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 Schemes completed in 6 months to 30 Sept 17 1WML Office 124k office 8k retail(2) 7k reception 14 resi. Units €24m(3) €53m(3) €547psf(4) €7.5m(5) €52.28psf(4)

  • Completed Aug 2017
  • Delivered profit on cost
  • f >80%(6)
  • Now 57% let

Schemes completed post 30 Sept 17 Two Dockland Central Office 73k(7) office €46m €11m(8) €760psf(9) €4.0m €50.20psf(10)

  • Completed Nov 2017
  • Delivered profit on cost

>35%(6)

  • Now 77% of entire let

Total completed 197k office 8k retail(2) 7k reception 14 resi. units €70m €64m(11) €11.5m Committed schemes 2WML Office 59k office 12k gym €21m €22m €680psf(4) €3.2m €51.23psf late 2018 1SJRQ Office 115k office 5k retail €18m €58m €639psf(4) €6.5m €54.58psf mid 2018 Total committed 174k office 17k retail/gym €39m €80m €9.7m

(1) Per C&W valuation at 30 Sept 17 (2)

  • Incl. 1k sq. ft. basement store

(3) Refer to footnote (2) on slide 12 (4) Office demise only (5) Commercial (incl. reception/townhall) and residential net (6) Assuming 6% stamp duty and no finance costs (7) 57k sq. ft. is committed refurbishment of entire 73k sq. ft. (8) €9.4m net of dilapidations received (9)

  • Est. total cost psf is net of dilaps

(10) For entire 73k sq. ft. For refurbished space only ERV is €50.26psf (11) €62.4m net of dilapidations received

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SLIDE 23

23

(1) Signed post 30 Sept (€0.6m) (2)

  • Incl. contribution to townhall/reception

(3) On lease signing (4) Assuming 6% stamp duty and no finance costs

1WML Completed development:

  • 124k sq. ft. office successfully completed in August 2017
  • Office now 57% let to Informatica, Core Media and Pinsent Masons(1):

– Total rent €4.1m (€57.38psf)(2) –

  • Avg. WAULT 11.7yrs(3)
  • Retail unit occupied by Spar which has moved from Hanover Building (2WML)
  • Profit on cost in excess of 80%(4) and yield on cost expected to exceed 9.5% when fully

let

  • Large townhall and reception attracting tenants and will provide a facility for all

Hibernia buildings in Windmill Quarter

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SLIDE 24

24

(1) Assuming 6% stamp duty and no finance costs (2)

  • Excl. BNY office space (not refurbished) the avg. rent is €53psf

(3) 10.3yrs excl. BNY

Two Dockland Central Completed development:

  • Refurbishment of 57k sq. ft. and all common areas completed in Nov-17

— Profit on cost >35%(1) — Yield on cost when fully let expected to be >7%

  • 77% of 73k sq. ft. building now let:

— Recent lettings include: HubSpot, ENI & Fountain Healthcare — Avg. rent in the building is €51psf(2) — Avg. WAULT 10yrs(3)

  • Terms agreed for majority of vacant space
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SLIDE 25

25

1SJRQ:

  • Prime river-fronted property in

Windmill Quarter

  • 120k sq. ft. due for completion

mid-2018

  • Attracting interest from

potential occupiers

Concept image: 2WML

4 1 2 3

  • 1SJRQ & 2WML

Committed developments:

2WML (formerly the Hanover Building):

  • €22m refurbishment and extension to create c.71k sq.
  • ft. building

— 59k sq. ft. office and 12k sq. ft. ground floor gym — Spar moved from ground floor to 1WML retail unit

  • Potential for linking to 1WML at ground and top floors
  • Shared facilities across Hibernia’s buildings in Windmill

Quarter attracting tenants

1. 1SJRQ 3. 2WML 2. 1WML 4. Observatory

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SLIDE 26

Sector Current NIA (sq. ft.) NIA post completion (sq. ft.) Full purchase price Comments Near term Cumberland Place (front block) Office 0k 50k(1) €0m(2)

  • Full planning in place
  • Likely commencement in 2018 once existing development

exposure reduced Total near term 0k 50k €0m Longer term Gateway Logistics /Office 14.1 acres(3) 115koffice(4) €10m

  • Strategic transport location
  • Redevelopment potential subject to planning

Blocks 1, 2 & 5 Clanwilliam Court and Marine House Office 135k 190k €80m

  • Refurbishment/redevelopment opportunity post 2020/2021
  • Potential to add up to 40% to existing NIA across all four

blocks and create an office cluster similar to Windmill Quarter Harcourt Square Office 117k on 1.9 acres 277k €72m

  • Planning in place for 277k sq. ft. redevelopment
  • Lease to OPW until Dec 2022
  • Site offers potential to create cluster of office assets

and facilities

  • Working to refine/improve scheme

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

  • Planning permission for two extra floors
  • Also potential for redevelopment as part of wider Earlsfort

Centre scheme Total longer term 274k 610k €182m

26

Development pipeline

(1) 49k sq. ft. office, 1k sq. ft. retail/reception (2) €51m (incl. costs) paid for existing block which was refurbished and completed in Sept 16. No land value attributed to new block at acquisition (3) Currently 178k sq. ft. of industrial/logistics (4) Planned new offices of c.115k sq. ft. plus potential to add a further c.130k sq. ft. of offices

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SLIDE 27

27

Market update Developments Portfolio management Highlights Conclusion and outlook Financial results

Agenda

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SLIDE 28

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

  • 1. Dublin CBD Offices

Traditional Core €467m 37% 6.3% 6.3% 4.5% 5.4% 5.6% €21.8m IFSC €268m 21% 3.5% 3.5% 3.6% 5.0% 5.2% €9.9m South Docks €296m 23% 10.0% 10.0% 2.0% 4.9% 5.2% €6.0m Total Dublin CBD Offices €1,031m 81% 6.6% 6.6% 3.5% 5.1% 5.4% €37.7m

  • 2. Dublin CBD Office Development

€100m 8% 1.2% 1.2%

  • 3. Dublin Residential

€117m 9% 0.1% 0.0% 4.4% 4.6% 4.8% €5.1m

  • 4. Industrial

€18m 2% (5.7%) (10.1%) 3.6% 5.1% 5.1% €0.7m Total Investment Properties (incl. offices) €1,266m 100% 5.4% 5.2% 3.6% 5.1% 5.3% €43.5m Value as at Sept 17 (all assets) % uplift since Mar 17

  • incl. new

acquisitions (1) % uplift since Mar 17

  • excl. new

acquisitions(1) Yield on Value %

28

Yields have tightened moderately since March 2017, though this has been focused on prime assets

(2) (3) (5) (6) (4)

Portfolio summary

(1) Includes capex in acquisition costs (2) Harcourt Square yield is the yield on the total value which includes residual land value (3) Includes full value of 2DC in IFSC (even though under refurbishment at 30 Sept 17) (4) Excludes the value of space occupied by Hibernia in South Dock House. (5) Includes 2WML, 1SJRQ & Cumberland Phase II

(2)

(6) Excludes Cannon Place as valued on vacant possession basis. C&W has valued Wyckham Point and Dundrum View on a gross yield basis ex acquisition costs : gross initial yield is 5.7% and reversion is 6.0% (7)

  • Excl. all CBD office developments but includes 2DC in Dublin CBD Offices

(6) (6) (2) (2) (2) (2) (2,6,7) (2,6,7) (2,6,7)

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SLIDE 29

In-place office portfolio 1,034k sq. ft. Committed developments (pre-let) 41k sq. ft. Committed developments (to let) 190k sq. ft. Near term pipeline 50k sq. ft. Longer term pipeline 336k sq. ft. TMT 38% Government Agency 25% Banking & Capital Markets 24% Professional Services 8% Other 3% Insurance & Reinsurance 2% 16% 12% 7% 5% 5% 4% 4% 4% 4% 4%

35% Remainder

29

Office portfolio statistics

Sept-16 Mar-17 Sept-17 All office(1) contracted rent €40.2m +5% €42.1m +3% €43.5m In-place office(1) contracted rent €40.2m

  • 5%

€38.0m +9% €41.3m In-place office WAULT(2) 5.9yrs +14% 6.7yrs +3% 6.9yrs In-place office vacancy(3) 6% 3% 10%(4)

Top 10 tenants of in-place portfolio

(1) Office areas only (i.e. excl. retail, basement space, gym, townhall etc.) (2)

  • Incl. incremental additional sq. ft. from Harcourt Square, Clanwilliam Court, Marine House, Earlsfort Terrace and Gateway (c.115k sq. ft. of office.) Note that there is also further development potential at Gateway for

c.130k sq. ft. of offices (1)

  • Excl. agreement with Iconic Offices at Clanwilliam

(2) To earlier of break or expiry (3) By net lettable office area. Office area only (i.e. excl. retail, basement space, gym, townhall etc.) (4) Following completion of 1WML in Aug-17

Industry split of in-place tenants

€41.3m

Portfolio by area

1.7m sq. ft.(1)

(2)

€41.3m

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SLIDE 30

30

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 Acquired in-place office portfolio €27.5m(€37psf) €33.9m(€47psf) 2.9yrs 4.9yrs 38% 0% 62% Completed office developments(4) €13.7m(€51psf) €14.0m(€51psf) 4.2yrs 10.7yrs 0% 62% 38% Whole in-place office portfolio €41.3m(€41psf) €47.9m(€48psf) 3.3yrs 6.9yrs 25% 21% 54% Pre-let committed schemes(5) €2.3m(€53psf) €2.2m(€51psf) 4.8yrs 10.5yrs 0% 22% 78% Whole office portfolio €43.5m(€41psf) €50.1m(€48psf) 3.4yrs 7.0yrs 24% 21% 55%

In-place office portfolio statistics

New lettings (esp. developments) growing income and extending WAULTs

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

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

(3) Mark to Market (4) 1 Cumberland Place, SOBO Works, 1DC, 1WML (5) 2DC

In-place office portfolio statistics

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SLIDE 31

Future lettings

Building Type Office NIA

  • sq. ft.

Available from Notes Central Quay Office 16k sq. ft. Immediately

  • In discussions with potential occupiers

1WML Office 54k sq. ft. Immediately

  • In discussions with potential occupiers

2DC Office 13k sq. ft. Immediately

  • Terms agreed for majority of the space

1SJRQ Office 115k sq. ft. Mid 2018

  • In discussions with potential occupiers

2WML Office 59k sq. ft. Late 2018

  • Marketing commenced

Total 257k sq. ft.

31

Office leases agreed and future lettings

Tenant Building Contracted rent €m Contracted rent €psf % of Group rent Term Notes To expiry To break Central Quay €0.1m €51psf 0.2% 10yrs 5yrs

  • Lease commenced June 2017 (4 months rent free)

1WML €1.4m €57.74psf(1) 2.8% 21yrs 12yrs

  • Lease commenced August 2017 (6 months rent free)

2DC €0.2m €55psf 0.4% 20yrs 10.5yrs

  • Lease commencement August 2017 (no rent free)

Clanwilliam Court €0.1m €45psf 0.2% 4yrs N/A

  • Lease commenced October 2017 (3 months rent free)

Marine House €0.3m €45psf 0.6% 3yrs N/A

  • Lease commenced October 2017 (3 months rent free)

1WML €0.6m €55.24psf(1) 1.2% 20yrs 10yrs

  • Lease commencement November 2017 (5 months rent free)

Total €2.7m 5.4%

Office leases agreed since Mar 17

Post Sept 17 (1) Includes contribution to shared townhall/reception

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SLIDE 32

32

Market update Developments Portfolio management Highlights Conclusion and outlook Financial results

Agenda

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SLIDE 33

33

Business performing well

— Development programme delivering and plenty still to come — Expect recycling of capital into new opportunities ✓

Tenant demand from domestic and overseas firms is strong

— Brexit moves starting to be made ✓

Hibernia has a clear strategy, talented team and low leverage

Conclusion and outlook

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SLIDE 34

34

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SLIDE 35

35

Appendix

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SLIDE 36

36

Key: Office Residential Industrial Office development Croke Park Fairview Park River Liffey Kings Inns St. Stephens Green 9 7 8 6 2 12 13 14 4 5 11 10 15

1 Wyckham Point 2 New Century House 3 Gateway Site 4 Montague House 5 Hardwicke House 6 Chancery Building and Chancery Apartments 7 2WML 8 1WML 9 Observatory 10 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 17 18 19

CBD

1 &16 Herbert Park

Location of portfolio

Source: Google Maps, Visit Dublin, Jones Lang LaSalle (1) Property assets > €5m in value as at 30 Sept 2017

Dublin Overview(1) Central Dublin portfolio(1)

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SLIDE 37

37

Increase rental income and duration Deploy capital into selective acquisitions or new developments Recycle capital to monetise gains and enhance forward returns Deliver improvements in environmental efficiency

  • f portfolio

Maintain an efficient balance sheet (target LTV 20%-30%) Delivery of development projects and preparation

  • f pipeline of

future developments

Strategic priorities

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SLIDE 38

€ '000

6 mths to 30-Sept-17 6 mths to 30-Sept-16 Revenue 25,928 18,306 Rental income 23,579 18,306 Property expenses (1,715) (1,620) Property Income 21,864 16,686 Performance related fees (2,179)

  • Administrative expenses

(6,501) (6,279) Net finance (costs) (3,081) (2,719) Net rental profit 10,103 7,688 Revaluation & other income/(expense): Investment properties 61,626 24,342 Other gains/ (losses)(3) (1,082) 379 Tax (expense) (43) (113) Total revaluation/other income: 60,501 24,608 Profit for the financial period 70,604 32,296 Diluted IFRS EPS (cents) 10.2 4.7 EPRA Earnings 9,024 7,981 EPRA EPS (cents) 1.3 1.2

€ '000

30-Sept-17 31-Mar-17 Investment properties (1) 1,265,607 1,167,387 Assets held for sale 385 385 Other non current assets 12,386 13,604 Cash and cash equivalents 18,624 18,148 Trade and other receivables 9,116 10,108 Gross assets 1,306,118 1,209,632 Current liabilities (28,988) (24,642) Financial liabilities (current)(2) (17,096)

  • Financial liabilities (non-current)

(180,990) (171,138) Net assets 1,079,044 1,013,852 Equity share capital 687,591 678,110 Retained earnings 417,328 346,738 Dividends paid (30,795) (20,755) Other reserves 4,920 9,759 Total equity 1,079,044 1,013,852 IFRS NAV per share (cents) 155.9 147.9 Diluted IFRS NAV per share (cents) 155.2 146.3 EPRA NAV per share (cents) 155.3 146.3

38

Summary financial statements

(1) Excludes the effect of the increase in stamp duty on commercial property transactions from 2% to 6% in Budget 2018 effective 11 Oct 17 (i.e. post 30-Sept-17 event) (2) Expect to repay 1WML facility in early 2018 hence reclassification as a current liability (3) Fair value movements on shares issued to settle performance fees (4) Dividends of €10m paid in 6mths to 30-Sept-17

Balance sheet highlights Summary income statement

(4)

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SLIDE 39

39 To earlier of rent review or lease expiry

Weighted average period to rent review or lease expiry of 2.9yrs excl. completed developments(2) Current in-place office contracted rent: €41.3m

€0m €2.0m €4.0m €6.0m €8.0m €10.0m €12.0m Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Contracted Rent Six months ended

  • Avg. rent: €47psf
  • Avg. rent: €26psf
  • Avg. rent: €34psf
  • Avg. rent: €57psf
  • Avg. rent: €30psf
  • Avg. rent: €31psf
  • Avg. rent: €25psf
  • Avg. rent: €38psf
  • Avg. rent: €47psf

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

(1) To earlier of rent review or lease expiry. Excludes various parking licenses, retail space in office buildings, Parkrite in the Forum/Clanwilliam, Crossfit & AIB ATM. Also excludes any rent review dates or expiries prior to Sept 17 (2) i.e. the ‘acquired in-place office’ portfolio (3) Note: OPW ERV in Mar-23 is internal Hibernia assessment

  • Avg. rent: €52psf
  • Avg. rent: €49psf
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SLIDE 40

1.1m 2.1m 1.5m 1.8m 1.8m 1.1m 1.9m 2.0m 1.3m 2.4m

0.0m 0.5m 1.0m 1.5m 2.0m 2.5m 3.0m 3.5m 2016 @ Mar 17 2016 2017 @ Mar 17 2017 2018 @ Mar 17 2018 2019 @ Mar 17 2019 2020 @ Mar 17 2020 Potential sq. ft. Expected year of completion

40

Supply pipeline remaining broadly stable although potential suburbs supply in 2020 growing

Source: Hibernia/CBRE estimates

Estimated development/refurbishment pipeline

Under Construction @ Mar 17 Planning Granted @ Mar 17 Planning Applied @ Mar 17 Pre-Planning @ Mar 17 Under Construction Planning Granted Planning Applied Pre-Planning Completed Pre-let

CBRE 10yr avg. CBD take-up = 1.3m sq. ft. CBRE 2016 take-up = 2.6m sq. ft. CBRE 10yr avg. take-up = 1.9m sq. ft.

Expected Dublin office development and refurbishment supply tending to move outwards