Hibernia REIT : Trading Update – February 2017

8 February 2017

Hibernia REIT plc ('Hibernia') today issues a trading update relating to the period from 1 October 2016 to date.

Highlights

• Full ownership of 1 Windmill Lane ('1WML') acquired and development due to complete ahead of schedule in mid-2017
• Two Dockland Central and 1 Sir John Rogerson's Quay ('1SJRQ') developments both remain on schedule: modest increase in anticipated expenditure at 1SJRQ
• New leases agreed at Harcourt Square and Two Dockland Central
• In-place office portfolio vacancy rate now below 4% following formation of flexible workspace partnership which is occupying 21,000 sq. ft. in Clanwilliam Court

Acquisitions
In December 2016 Hibernia acquired the 50% interest in 1WML held by affiliates of Starwood Capital Group ('Starwood'), giving it full control of the development scheme, where 122,000 sq. ft. of offices, 7,000 sq. ft. of retail and 14 residential units are under construction. Hibernia paid €27.5m and assumed Starwood's 50% share of the €44.2m debt facility.

Developments and refurbishments
Progress at 1WML has been good and the project is running ahead of schedule: the office building is now enclosed, fit-out has begun and practical completion is expected in mid-2017 (previously late 2017). Discussions are on-going with a number of parties regarding potential lettings.

Both Two Dockland Central and 1SJRQ remain on schedule for their expected delivery dates in late 2017 and mid-2018, respectively. At 1SJRQ, worse than expected site-specific ground conditions together with some design improvements mean total capital expenditure is anticipated to increase by €2.5m to €57.5m, though this is likely to be partly mitigated by an increase in gross development value.

Planning permission has been received for a new office block of 50,000 sq. ft. at the front of Cumberland House ('Cumberland Phase 2') and preliminary planning approval has been granted at Hanover Building to fully refurbish and extend the building by over 14,000 sq. ft. (a 30% increase in the office space).

Asset management
Hibernia agreed a new non-renewable six year lease with the Office of Public Works ('OPW') at Harcourt Square, which commenced on 1 January 2017. The rent was increased to €6.0m per annum (previously €4.9m) and a one-off arrears payment of €0.5m was received. The new lease gives both parties certainty regarding the OPW's departure date and allows Hibernia to continue to refine its plans for the property, which has planning permission for a development of up to 276,500 sq. ft. of offices.

In January 2017 Hibernia formed a partnership with Iconic Offices ('Iconic'), a leading Dublin-based flexible workspace provider, for the establishment of a serviced office and co-working business which will occupy 21,000 sq. ft. in Block 1 Clanwilliam Court (acquired by Hibernia in June 2016) for five years. Hibernia will receive the majority of net income from the occupier (after amortisation of fit-out costs) up to a level equating to a €45 per sq. ft. headline rent. Iconic will receive the majority of any net income above this level.

At Two Dockland Central, 16,000 sq. ft. of the 57,000 sq. ft. under refurbishment has been pre-let to HubSpot on a 19 year lease at an initial rent of €52.50 per sq. ft. The tenant will receive six months rent free from lease commencement (expected mid-2017). HubSpot already occupies 27,500 sq. ft. of office accommodation in the adjoining One Dockland Central.

Building management
Following its formation in July 2016, the building management department now has seven of Hibernia's multi-let office buildings under its direct management with the remaining multi-let buildings expected to follow by mid-2017.

Balance sheet
At 31 December 2016 Hibernia had net debt of €148m and cash and undrawn facilities of €296m, including 100% of the 1WML debt facility.

Kevin Nowlan, Chief Executive Officer of Hibernia, said:

'The portfolio has performed well in the period thanks to our asset management activity, with new leases signed at Harcourt Square and Two Dockland Central, the formation of a flexible workspace partnership with Iconic and planning permissions received on two potential developments.

'We are particularly pleased with progress at Windmill Lane, which we now own fully, where development work is ahead of schedule and completion is now expected in mid-2017.

'With a strong balance sheet, a talented team and an exciting pipeline of developments, we remain optimistic for the future.'

ENDS

Contacts:
Hibernia REIT plc +353 1 536 9100
Kevin Nowlan, Chief Executive Officer
Tom Edwards-Moss, Chief Financial Officer

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 an Irish Real Estate Investment Trust ('REIT') and is listed on the Irish and London Stock Exchanges. The principal activity of Hibernia is to acquire and hold investments in Irish property (primarily commercial property) with a view to maximising shareholder returns.

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