Preliminary Results May 2020
Disclaimer This presentation (hereinafter "this document") has been prepared by Hibernia REIT plc (“Hibernia”, the “Company“, “Group”, “we” or “us”) for information purposes only. This document has been prepared in good faith but the information contained in it has not been independently verified and does not purport to be comprehensive. This document is neither a prospectus nor an offer nor an invitation to apply for securities. No representation or warranty, express or implied, is given by or on behalf of the Company, its group companies, or any of their respective shareholders, directors, officers, employees, advisers, agents or any other persons as to the accuracy, completeness, fairness or sufficiency of the information, projections, forecasts or opinions contained in this presentation. In particular, the market data in this document has been sourced from third parties. Save in the case of fraud, no liability is accepted for any errors, omissions or inaccuracies in any of the information or opinions in this document. Certain information contained herein may constitute “forward - looking statements” which can be identified by the use of terms such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, “continue”, “target” or “believe” (or negatives thereof) or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or actual performance of the Group may differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of, and no reliance should be placed on, such forward-looking statements. There is no guarantee that the Group will generate a particular rate of return. Pictured on cover: 1SJRQ in the evening Hibernia REIT plc PRELIMINARY RESULTS | MAY 2020 2
Agenda Highlights Financial results Market update Developments Portfolio management Conclusion and outlook Pictured: Dublin’s Con vention Centre photographed from South Docks Hibernia REIT plc PRELIMINARY RESULTS | MAY 2020 3
Results summary 12 months 12 months to Mar-20 to Mar-19 Portfolio value (1) +2.0% +7.9% Portfolio value (excl. stamp duty increase) (1,2) +3.5% Total property return (“TPR”) (3) 5.9% 11.6% TPR vs. MSCI Ireland Index (4) +1.5pp +4.1pp EPRA NAV per share +3.5% +8.9% EPRA NAV per share (excl. stamp duty increase) (2) +5.3% EPRA earnings per share (5) +39.9% +40.4% Total accounting return (“TAR”) (6) 5.6% 11.1% TAR (excl. stamp duty increase) (2,6) +7.5% (1) Like-for-like change (incl. finance costs & 1.5pp increase in stamp duty) and excluding assets acquired and disposed of during the period (2) Stamp duty on commercial property increased by 1.5pp to 7.5% in Oct-19. At Mar-20 the estimated impact of this for Hibernia was a €22m ( -1.5%) reduction in portfolio value (3) TPR is calculated on an “all assets” basis as per MSCI (4) MSCI/SCSI Ireland Quarterly Property All Assets Index (excl. Hibernia) (5) Excludes arrangement fee write-off in FY19 (6) Calculated as EPRA NAV per share growth in period plus dividends per share paid in period Hibernia REIT plc PRELIMINARY RESULTS | MAY 2020 4
Business highlights for the financial year 1. Further growth in rental income… 4. …and making progress with development pipeline • Contracted rent +14.1% to €65.7m (1) • Office pipeline +5% to 566,000 sq. ft. with new planning grants at Harcourt and Clanwilliam – New lettings added €5.7m • Mixed-use pipeline +5% to 154.3 acres following further – Rent reviews added €2.7m acquisitions • Net rental income +9.9% to €58.6m 5. Effective recycling of capital 2. …and distributable earnings • FY19 net sales proceeds of €60.3m reinvested in: – Nine acquisitions for €23.3m (2) • Overall overheads cut by €5.9m ( -30.6%) – Development capex of €21.3m • EPRA EPS +39.9% to 5.5c – €25.0m share buyback (3) • Full year DPS +35.7% to 4.75c 6. Focus on sustainability 3. De- risking 2 Cumberland Place… • Full-time Sustainability Manager joined in January 2020 • Lettable office area +13% to 58,000 sq. ft. • Reviewing all aspects of sustainability programme to drive • 41% pre-let to 3M in April 2020 further improvements • Expected to complete scheme by end of 2020 (1) Increased to €67.2m following pre -let to 3M in Apr-20 (2) Incl. acquisition costs (3) Buyback programme completed in November 2019 with average purchase price of €1.42 per share Hibernia REIT plc PRELIMINARY RESULTS | MAY 2020 5
Business update 1. COVID-19 precautions • We are working on “return to work” • Head office staff working from home protocols and plans for tenant staff and • Managed buildings remain accessible for tenants Hibernia team covering access control, physical distancing, cleaning and signage • Extra, preventative cleaning measures adopted within buildings • Activity at 2 Cumberland Place gradually • Construction sites in Ireland closed 28 March to 18 May ramping up following end of site shutdowns 2. Working closely with our occupiers • Overall we have a strong tenant base • We are working to support them as appropriate • Rent collection statistics to date remain strong – 93.5% of Q/E June commercial rent collected (1) – 97% of residential rent for May collected (1) 3. Limited current development exposure • Only 2 Cumberland Place (58,000 sq. ft.) under construction and due to complete by end of 2020 – 41% pre-let (2) 4. Robust funding position • 16.5% LTV amongst lowest in European REIT universe • No maturities until Dec-23 Pictured: examples of COVID-19 signage in 1WML (1) As at 26 May 2020 (2) In Apr-20 3M pre- let 24,000 sq. ft. in 2 Cumberland taking contracted rent to €67.2m. The Mar -20 ERV of the remaining unlet spac e in 2 Cumberland is €1.9m Hibernia REIT plc PRELIMINARY RESULTS | MAY 2020 6
Looking ahead 1. Negative market outlook in near term … • COVID-19 and anticipated recession expected to reduce occupier demand • Full impact on market rents and property values yet to be felt – Grade A CBD office vacancy rate of 5.9% at Mar-20 2. …but we continue to believe Dublin has favourable fundamentals in the longer term • Demand: Continued shift to “service - orientated” jobs, Brexit movers, growing population • Supply: Limited land (especially in central Dublin), limited development funding 3. We do not forsee a secular decline in city centre offices • COVID-19 is likely to accelerate changing working patterns • But: – HQ offices play a key role in collaboration and exchange of ideas; and – Health considerations likely to reduce hot-desking and office densities in the near term 4. Hibernia is well positioned for all eventualities • Low leverage and €136m of uncommitted funding in place • Stable investment portfolio with WAULT of 6.4 years and exciting future development pipeline • Seeking further sustainability improvements • Experienced team Hibernia REIT plc PRELIMINARY RESULTS | MAY 2020 7
Agenda Highlights Financial results Market update Developments Portfolio management Conclusion and outlook Pictured: Retained tramyard gate, 1SJRQ Hibernia REIT plc PRELIMINARY RESULTS | MAY 2020 8
Financial highlights Balance sheet Mar-20 (1) Mar-19 Change +2.0% (2) Portfolio value €1,465.2m €1,395.4m Net debt € 241.4m € 217.1m +11.2% Loan to value 16.5% 15.6% +0.9pp Net assets €1,231.1m €1,218.5m +1.0% EPRA NAV per share 179.3c 173.3c +3.5% Income statement Mar-20 Mar-19 Change Net rental income €58.6m €53.3m +9.9% Revaluation and disposal gain € 22.9m € 98.1m (76.7)% Profit after tax € 61.0m €123.5m (50.6)% EPRA earnings €38.1m €27.5m +38.7% EPRA EPS 5.5c 4.0c +39.9% Full year dividend per share 4.75c 3.5c +35.7% (1) C&W, the independent valuer, estimates that if stamp duty had not increased by 1.5pp in early Oct-19, the value of the Hibernia portfolio at Mar- 20 would be €22m higher (c.+1.5%) (2) LfL change (incl. finance costs). Excluding the increase in stamp duty the LfL change would have been +3.5% Hibernia REIT plc PRELIMINARY RESULTS | MAY 2020 9
EPRA NAV per share movement since 31 March 2019 190 Like-for- like “in - place” office valuation: +2.0% (c.55% ERV impact (2) ) 188 186 5.5c 184 1.0c EPRA NAV per share (c) 182 Net valuation uplift: 6.5c (3.8c) 2.7c 180 179.3c (3.2c) 178 3.8c (1) IFSC 2 Cumberland +3.5% Resi 176 South Docks 174 173.3c Other Trad Core 172 170 Mar-19 Investment Development EPRA earnings Dividends paid Share buyback & Estimated stamp Mar-20 (3) properties reval. properties reval. other duty impact 159.1 6.8c 6.8c 4.0c (3.4c) - - 173.3c Mar-18 Mar-19 (1) Comprises South Docks +4.0c, Traditional Core -0.3c, IFSC 0.2c, Resi 0.7c, Other -0.8c (2) Based on standing office (in-place office) investments only in 12 months to Mar-20 (3) Includes revaluation of Group’s head office Hibernia REIT plc PRELIMINARY RESULTS | MAY 2020 10
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