Preliminary Results May 2016
Disclaimer This presentation (hereinafter "this document") has been prepared by Hibernia REIT plc (the "Company“ or “Group”) for information purposes only. This document has been prepared in good faith but the information contained in it has not been independently verified and does not purport to be comprehensive. This document is neither a prospectus nor an offer nor an invitation to apply for securities. No representation or warranty, express or implied, is given by or on behalf of the Company, its group companies, or any of their respective shareholders, directors, officers, employees, advisers, agents or any other persons as to the accuracy, completeness, fairness or sufficiency of the information, projections, forecasts or opinions contained in this presentation. In particular, the market data in this document has been sourced from third parties. Save in the case of fraud, no liability is accepted for any errors, omissions or inaccuracies in any of the information or opinions in this document. Certain information contained herein may constitute "forward-looking statements“ . Due to various risks and uncertainties, actual events or results or actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of, and no reliance should be placed on, such forward-looking statements. There is no guarantee that the Company will generate a particular rate of return. 2
Agenda Highlights Financial results Market update Acquisitions and developments Portfolio management Conclusion and outlook 3
Highlights • Excellent financial performance – EPRA NAV per share +17% to 130.8c in year to March 2016 – Net income of € 136.8m incl. revaluation gain of € 125.1m – Final dividend of 0.8c per share, bringing total for year to 1.5c per share • Selective acquisitions enhancing portfolio – Rental growth plays: e.g. Central Quay, Hardwicke and Montague – Additions to development pipeline: e.g. Marine House, Earlsfort Terrace • Development programme progressing well – 3 completed schemes delivered profit on cost in excess of 30% 4 committed schemes delivering 354k (1) sq. ft. of office space in the next 24 months – – Longer term pipeline expanded to 6 schemes • Letting activity growing rent roll substantially Over 157k sq. ft. of office lettings (2) in year – – Contracted rent roll now € 39.0m, +72% on March 2015 • Management team and funding in place (1) Office areas only (e.g excl. basement areas etc.). 345k sq. ft. includes: Cumberland House (127k sq. ft.), 1WML (50% share equating to 61k sq. ft.), 1 SJRQ (110k sq. ft.) and Guild House (56k of 72k is committed refurbishment). As at 31st of March, the entire of Guild House was part of the in-place office portfolio, not committed schemes. Conversely, 30k sq. ft. of 1DLC and the entire 11k sq. ft. of SOBO Works were committed developments at 31st March but have now completed and are considered in-place office. See slide 25 for more details 4 (2) Incl. storage spaces
Portfolio overview as at 31 March 2016 Portfolio by sector (by value) Office and development portfolio (by net lettable area) Residential 12% Committed developments* Industrial Office IFSC 340k sq. ft. (pre-let 105k sq. ft.) 1% 25% CBD Office In-place office portfolio* Development / Refurb 764k sq. ft. Total: € 928m Total: 1.5m sq. ft. 17% Longer term development Office South Docks pipeline** 19% Office Traditional Core 371k sq. ft. 26% Portfolio of 25 properties (17 completed office (1) properties) • Portfolio total passing rent of € 30.0m (2) and total contracted rent of € 39.0m (2,3) • • In-place office (excl. refurbishments and developments) average contracted rent of € 33psf with an average ERV of € 44psf (4) In-place office WAULT to rent review of 2.0yrs (5) and 4.3yrs to earlier of break or lease expiry • • In-place office vacancy rate of 6% Notes to the office development portfolio: (1) Includes Camden Street *Office areas only (e.g. excl. basement areas etc.). This is the position as at 31 st of March and included: Cumberland (2) Includes net rental income from residential House (127k sq. ft.), 1WML (61k sq. ft. representing the 50% share), 1SJRQ (110k sq. ft.), 1DLC (30k sq. ft. of total 73.9k (3) Includes pre-let refurbishments sq. ft. was still under refurbishment), SOBO Works (11k sq. ft.). Post 31 st March 1DLC and SOBO Works completed and (4) All ERVs are CBRE assessments except for Harcourt Square which is an internal assessment are now in-place office assets. Conversely, Guild House was classified as an in-place asset as at 31 st of March but 56k of (5) Earlier of review or expiry 72k is now committed refurbishment (see slide 25 for details) **Includes incremental additional sq. ft. from Harcourt Square, Hanover Building, Marine House & Earlsfort Terrace. It also includes the potential new offices at Gateway (c.115k sq. ft.) and the front site at Cumberland House. Note that there is also development potential at Gateway for a further c.130k sq. ft. of offices (see slide 29 for details) 5
Further opportunity • Favourable market conditions • Hibernia’s committed development schemes completing in next 24 months: longer term pipeline gives optionality • In-place office portfolio has asset management angles and is heavily reversionary • Selective recycling likely • Further acquisition opportunities expected and flexible funding in place to exploit these 6
Agenda Highlights Financial results Market update Acquisitions and developments Portfolio management Conclusion and outlook 7
Financial highlights Balance sheet EPRA NAV per share progression ( €’000) 31-Mar-16 31-Mar-15 % change 135c Portfolio value 927,656 641,296 45% 130.8c Net debt/(cash) 52,918 (139,048) n/a 130c +7% Loan to value 5.7% n/a n/a Net assets 896,574 753,134 19% 125c 122.1c EPRA NAV per share (cent) 130.8c 111.8c 17% +36% EPRA NAV per share (cent) 120c +9% Income statement 115c 111.8c 12 months to 12 months to ( €’000) 31-Mar-16 31-Mar-15 % change +7% 110c Property income (1) 30,289 18,044 68% Revaluation gain (2) 125,056 90,868 38% 104.7c 105c Net income 136,797 92,232 48% +9% EPRA earnings 10,024 3,961 153% 100c EPRA EPS 1.5c 0.8c 88% 96.4c Dividend per share 1.5c 0.8c 88% 95c 90c Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Valuation uplifts and income driving strong increases in NAV (1) Includes receipt of € 4.9m (FBD surrender) in 2016 and € 2.4m (Commerzbank surrender) in 2015 (2) Prior year figure includes €10m gain on conveyance of Block 3 which has been reclassified from ‘ Other G ains’ 8
EPRA NAV per share movement since 31 March 15 EPRA NAV per share movement since 31 Mar 15 Valuation uplift: 18.2c 133 1.5 8.2 0.04 130.8 0.5 1SJRQ (1.2) 1WML 128 Cumberland House EPRA NAV cent per share 123 10.0 Other +17% South Docks 118 IFSC Traditional 113 111.8 Core 108 103 Mar-15 Investment Development Non-core sales EPRA EPS Dividends paid Other Mar-16 properties reval. properties reval. 9
Impact of internalisation on financial statements Summary income statement (1) IM base fee 31-Mar-16 30-Mar-15 • Internalisation took effect from 1 April 2015 and Revenue 32,786 18,769 consequently no base fees were paid in the year Direct property costs (2,497) (725) (2) IM performance fee Property Income 30,289 18,044 • Existing arrangements remain in place until expiry of (1) IM base fee - (4,690) Investment Management Agreement in November (2) IM performance fee (6,069) (5,772) 2018 (3) Administrative expenses (8,696) (1,584) (3) Administrative expenses Net finance expense (4,087) (1,575) • Costs of Investment Manager of c. € 2.6m per annum Net rental profit 11,437 4,423 (mainly staff and office costs) now included Revaluation & Other gains/(losses): • Charge of € 1.8m from amortisation of prepaid remuneration asset relating to € 14.2m paid for base fee Investment properties 125,056 90,868 buyout. € 11.6m remains to be amortised over period to Other losses (171) (2,368) November 2018 (c. € 4.5m per annum) Tax credit / (expense) 475 (691) • Non internalisation-related administrative expenses increased substantially over prior year due in particular Total revaluation/other losses: 125,360 87,809 to increased professional advisers fees and a change in Net income for the period 136,797 92,232 general overhead VAT recovery rate Diluted IFRS EPS (cents) 20.1 18.3 Internalisation expected to be earnings neutral over EPRA Earnings 10,024 3,961 remaining life of IMA Diluted EPRA EPS (cents) 1.5 0.8 10
Substantial financial capacity in place Hedged Hedged € 100m (1) € 22m (2) RCF IPO P+OO 1WML facility Sources of funds € 400m € 372m € 286m € 22m Committed capex € 104m Remaining investment capacity € 265m Net cash invested Uses of funds € 711m € 0m € 200m € 400m € 600m € 800m € 1000m € 1200m Current LTV of 5.7%: if current facilities fully invested, LTV would be 32.5% (1) € 50m hedged from May 16 to Nov 16 and € 100m hedged from Nov 16 to Nov 20. Hedging instruments are a combination of interest rate caps and swaptions with strike rates of 1% (reference rate is 3M Euribor) (2) Facility fully hedged per expected drawing schedule using interest rate caps with a 1% strike rate (reference rate its 3M Euribor) 11
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