Preliminary Results May 2015
Disclaimer 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 or 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. This Presentation is available only to persons who are (1) both Qualified Institutional Buyers as defined in Rule 144A under the US Securities Act of 1933, as amended, as well as Qualified Purchasers within the meaning of section 2(a)(51) of the US Investment Company Act of 1940, as amended, or (2) outside the United States and not US persons as defined in Regulation S under the US Securities Act of 1933, as amended. 2
Agenda Highlights Financial results Market update Acquisitions and developments Portfolio management Conclusion and outlook 3
Overview • Highly active but disciplined period of investment • Central Dublin portfolio assembled and well positioned to deliver rental increases • Already delivering excellent financial performance and final dividend of 0.5c declared • Proposed internalisation of management team 4
Lots to come Delivery of new space early in the cycle • Residential: Block 3, Wyckham Point • Office: Windmill Lane, SJRQ and Cumberland House • Longer term: Harcourt Square and Gateway Driving rental growth through active management, refurbishment and rent reviews • Average office rent € 34.5psf with avg. 2.8 years to review (1) • Commerzbank House, Observatory live/work units Further investment • € 139m of cash at 31 March ( € 96m net of Hardwicke option) • Substantial debt capacity • Multiple opportunities being assessed (1) To earlier of rent review or lease expiry 5
Agenda Highlights Financial results Market update Acquisitions and developments Portfolio management Conclusion and outlook 6
Financial highlights • 16.0% increase in EPRA NAV since March 14 driven by Summary income statement valuation gains • 6.8% increase in EPRA NAV since Sept 14 impacted by ( € in thousands) 6 mths to 6 mths to effects of second equity issue Y/E 31-Mar 31-Mar-15 30-Sep-14 • Revenue 18,769 13,011 5,758 Performance fee due under IMA is non-cash item as it is settled in shares Property outgoings (725) (588) (137) Property income 18,044 12,423 5,621 • Final dividend of 0.5c per share declared bringing total for IM base fee (4,690) (2,829) (1,861) year to 0.8c per share IM performance fee accrual (5,772) (5,772) – Administrative expenses (1,584) (865) (717) Balance sheet highlights Operating profit 5,998 2,957 3,043 ( € in thousands) 31-Mar 30-Sep Finance income 399 161 238 Investment Properties (1) 641,296 438,060 Finance expense (1,974) (1,771) (203) Assets Held for Sale 18,499 – Rental profit 4,423 1,347 3,078 Loans 152 67,365 Revaluation/disposal gains: Current Assets (2) 148,094 7,318 Investment properties 85,768 56,898 28,869 Current Liabilities (12,210) (67,149) Non-core disposals (net) 2,041 2,040 – Total revaluation/disposal gains 87,809 58,938 28,869 Non-Current Liabilities (42,697) (42,681) Net income 92,232 60,285 31,947 Net Assets 753,134 402,913 Diluted IFRS EPS (cent) 18.3 10.0 8.3 Diluted EPRA NAV per share (cent) 111.8 104.7 (1) € 636.2m at 31-Mar after Windmill option (in current liabilities) (2) Excl. non current assets held for sale 7
EPRA NAV per share movement since 30 Sep 14 EPRA NAV per share movement since 30 Sep 14 120 115 0.1 Valuation uplift: 8.5 0.6 0.1 1.0 111.8 EPRA NAV cents per share ( 1.9 ) ( 0.3 ) 110 7.5 +7% 104.7 105 +16% 100 96.4 95 Sep-14 Investment Development Profit on sale of EPRA EPS Secondary Dividends paid Other Mar-15 Mar-14 properties properties non core assets equity issue reval. reval. 8
Balance sheet remains robust Current financial capacity Incremental investment capacity ( € in millions) ( € in millions) Net cash as at 31 March 15 139 Incremental new debt capacity @ 35% LTV 300 Existing BoI revolving credit facility 100 Estimated Income from Non-Core Sales 18 Hardwicke and Montague deferred Estimated committed and near term capex: (43) (125) consideration (see following page for more detail) Current cash & committed facilities 196 Further incremental investment capacity 193 c. € 400m of capacity for development and acquisitions 9
Forecast capital expenditure for committed and near term developments and refurbishments Forecast capital expenditure by financial year Wyckham Point € 11.5m (1) Commerzbank House € 10m (2) € 60.0m Committed Observatory Live/Work € 1.5m Windmill Lane € 52m (3) € 48m € 50.0m Near Term 1-6 SJRQ € 50m (3) SJRQ € 44m Total € 125m € 4m SJRQ € 40.0m € 23m Windmill Lane € 33m € 21m SJRQ € 30.0m € 23m € 20.0m Commerzbank Windmill Lane House € 21m € 10m Wyckham Point € 10.0m € 11.5m Windmill Lane € 10m Observatory Live/Work € 1.5m € 0.0m March 2016 March 2017 March 2018 Committed Near Term (1) € 13.5m has already been spent (2) € 7.9m net of dilapidations received (3) Assumes 100% interest 10
Potential incremental rent roll from committed & near term developments/refurbishments Based on CBRE estimated rental values, March 2015 (1) € 45.0m € 39.3m € 40.0m € 4.9m 1-6 SJRQ (3) € 0.4m € 35.0m Observatory Live/Work + € 16.6m € 5.1m Windmill Lane (3) +73% € 30.0m € 2.5m Commerzbank House (4) € 25.0m € 3.7m Wyckham Point (2) € 22.7m € 20.0m € 15.0m € 10.0m € 5.0m € 0.0m Contracted rent roll as at Committed refurb / Near term Proforma 31 March 2015 development development Expect committed and near term developments/refurbishments to add c. € 17m to rent roll by mid 2018 (1) Excludes rent reviews and Cumberland House (2) Net rental income (3) Commercial units only/based on 100% interest 11 (4) ERV of the 55k sq. ft. currently being refurbished
Proposed internalisation of Investment Manager • All 16 team members to move to Company • Proposed at no material additional cost to Hibernia compared to retaining existing structure for remaining 3.5 years of initial term • Expected benefits to Company including broadening potential investor universe, simplifying the structure and transparency and enhancing accountability • Upfront payment (50:50 cash and shares and subject to 3yr lock-up/earn out provisions) – NPV of base fees on 31 March 15 NAV for remaining 3.5yrs less costs assumed by REIT (c. € 14m) – Book value of net assets of Investment Manager (c. € 2m at 31 March 15 excl. performance fee) • Potential deferred payments in shares for – True-up payments to base fee if NAV increases at 31 March 2016, 2017, 2018 – Any JV fees due to IM on Windmill Lane/SJRQ – Performance fees as per existing IMA (15% set aside for non shareholder employees) • Transaction subject to approval by shareholders and regulatory approvals • Expected treatment under IFRS 3 as a business combination 12
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