Hibernia REIT : Interim Results – November 2017

16 November 2017

Hibernia REIT plc ('Hibernia', the 'Company' or the 'Group') today announces its interim results for the six months to 30 September 2017. Highlights for the period:

Good financial performance helped by yield compression and developments

• Investment property portfolio value of €1,265.6m, up 5.2% in the period (developments up 8.4%)
• Six-month total property return of 7.2% vs IPD Ireland Index of 4.8%
• EPRA NAV per share of 155.3 cent, up 6.2% since March 2017
• Net rental income of €21.9m, up 31.0% on same period last year (Sept 16: €16.7m)
• Profit before tax of €70.6m (Sept 16: €32.4m) including revaluation surplus
• EPRA earnings of €9.0m, up 13.1% on same period last year (Sept 16: €8.0m)

Continued progress with development programme: 1WML and 2DC completed

• 1WML completed in August 2017, delivering 124,000 sq. ft. Grade A office and profit on cost >80%
• Three committed schemes at September 2017 (247,000 sq. ft. Grade A offices) completing by end 2018
  • Hanover Building, to be renamed '2WML' (71,000 sq. ft., incl. 12,000 sq. ft. gym) added to committed schemes in May 2017
  • 2DC (73,000 sq. ft.) completed in November 2017, delivering a profit on cost >35%
• Near and longer-term pipeline of five schemes totalling 660,000 sq. ft. of office space post completion

New lettings increasing income and WAULT of portfolio, with plenty more to come

• Annual contracted rent roll now €49.5m, up 7.1% on 30 September 2016
• 'In-place' office portfolio income duration increased with WAULT to earlier of break / expiry now 6.9 years, up 16.9% on 30 September 2016
  • Increase in WAULT driven by new lettings in completed developments which have avg. term to earlier of break / expiry of 10.7 years and avg. rents of €51psf
• Remaining 'in-place' CBD offices have avg. rents of €37psf, reversionary potential of 23% and an avg. period to earlier of rent review or expiry of 2.9 years

Strong balance sheet with undrawn facilities available for further investment

• Net debt at 30 September 2017 of €181.0m, LTV of 14.3% (March 2017: €155.3m, LTV 13.3%)
• Cash and undrawn facilities of €263.2m: €150.0m net of committed development spend and planned repayment of 1WML facility

Growing dividend as rental income increases

• Interim dividend up 46.7% to 1.1 cent per share declared, representing 50% of dividends paid in respect of the prior year (Sept 2016: 0.75 cent)
• Expect further growth as developments are leased and reversion captured via lease events / reviews

Estimated financial impact of increase in stamp duty

• Stamp duty on commercial property transactions increased from 2% to 6%, effective 11 October 2017
• Estimated impact if effective as at 30 September 2017:
  • Portfolio value and profit before tax would have reduced by €53.7m
  • Proforma EPRA NAV per share would have been 147.5 cent, up 0.8% since March 2017

Kevin Nowlan, Chief Executive Officer of Hibernia, said:

'We are pleased to report good performance by the Group in the first half with portfolio returns well in excess of those of the MSCI/IPD Ireland property index, helped by our development programme. The increase in stamp duty occurred after the period end and is therefore not reflected in the numbers we have reported, although we estimate its immediate financial impact. It remains to be seen whether the change will have any impact on investment market sentiment. At present demand for prime assets continues to be robust.

'Demand from domestic and international occupiers for office space in Dublin remains very strong: 2017 is likely to be close to a record year for office take-up and we have started to see some Brexit-related lettings occurring. In the longer term Dublin is expected to have one of the highest growth rates in office-based employment among major European cities, which bodes well for future tenant demand.

'We remain optimistic about our prospects: our portfolio is rich in opportunity, we expect to recycle capital and we have flexible, low-cost funding available to support further developments and acquisitions as appropriate.'

Net of capex and acquisition costs
Developments include 1WML which completed at the end of August 2017
Total property return is the return of the property portfolio (capital and income) as calculated by MSCI, the producers of the MSCI/IPD Ireland Index.
An alternative performance measure ('APM'). The Group uses a number of such financial measures to describe its performance, which are not defined under IFRS and which are therefore considered APMs. In particular, measures defined by EPRA are an important way for investors to compare similar real estate companies. For further information see 'Supplementary information' at the end of this report.
Assuming 6% stamp duty and no finance costs
57k sq.ft. of entire 2DC (73k sq.ft.) is refurbished space
Included pre-let refurbishments, residential income net. Excluding Iconic arrangement in Clanwilliam
Excludes refurbishment and development projects

Contacts:

Murray Consultants
Doug Keatinge: +353 86 037 4163, dkeatinge@murrayconsultants.ie
Jill Farrelly: +353 87 738 6608, jfarrelly@murrayconsultants.ie
About Hibernia REIT plc

Hibernia REIT plc is a Dublin-focused Irish Real Estate Investment Trust ('REIT'), listed on the Irish and London Stock Exchanges, which owns and develops Irish property. All of Hibernia's portfolio of properties is in Dublin and it specialises in city centre offices.

The results presentation will take place at 9.00 am today: a conference call facility will be available to listen to the presentation live using the following details:

Ireland Toll: +353 (0)1 436 0959
Ireland Toll-Free: 1800 930 488

Participant code: 830614

Disclaimer

This Announcement contains forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Group or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements speak only as at the date of this Announcement. The Group will not undertake any obligation to release publicly any revision or updates to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise except as required by law or by any appropriate regulatory authority.

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