Preliminary Results
May 2017
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” 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 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.
Pictured on cover: 1WML Reception/Town Hall
2
Agenda
Highlights
Financial results
Market update
Acquisitions and developments
Portfolio management
Conclusion and outlook
3
Highlights
• Strong financial performance, driven by developments
– Portfolio value of €1.2bn, up 9.9% in the year(1) (developments up 47.2%(1)) and 7.4% in H2(1)
– 12 month total property return of 14.5% vs IPD Ireland Index up 11.2%
– EPRA NAV per share of 146.3c, up 11.9% in year
– EPRA earnings up 192.5%(2) to €15.0m, dividend for year of 2.2c up 46.7%
• Development programme making excellent progress and enhanced by acquisitions
– Three schemes completed, delivering 191k sq. ft. and profit on cost of 50%
– Four committed schemes delivering 354k sq. ft. of offices over period to late 2018
– Pipeline expanded to 5 schemes (660k sq. ft.) with acquisition of Clanwilliam Court
• Income and WAULTs increased significantly through leasing activity
– 320k sq. ft. of new office lettings/lease extensions in the year
– Contracted rent roll now €48.3m, +24% in the year
– WAULT to break of in-place offices now 6.7yrs, +56% in the year
• Asset management initiatives
– Building management department formed
– Flexible workspace arrangement with Iconic Offices established
• Modest leverage and flexible funding in place
– Net debt €155.3m, LTV 13.3% (March 2016 5.7%)
– Cash & undrawn facilities €288.9m, €149.5m net of committed capex and anticipated repayment of
1WML facility
(1)
(2)
Net of capex and acquisition costs
Excl. €4.9m surrender premium
4
Portfolio overview as at 31 March 2017
Portfolio by sector (by value)
Industrial
1%
Office and development portfolio (by net lettable area)
Residential
10%
Committed developments (pre-let)
73k sq. ft.
Office IFSC
22%
In-place office portfolio
915k sq. ft.
Committed
developments
(to let)
280k sq. ft.
CBD Office
Development
14%
Total: €1.2bn
Total: 1.7m sq. ft.(1)
Office South Docks
15%
Near term
pipeline
50k sq. ft.(2)
Office Traditional Core
38%
Longer term pipeline
336k sq. ft. (3)
Portfolio key statistics
Number of
properties
Portfolio rent(4)
In-place office rent
and ERV(4)
In-place
office WAULT(4)
In-place
office vacancy
Passing:
€42.2m
Contracted:
€40psf
To review/expiry: 3.5yrs
Contracted:
€48.3m
ERV:
€48psf(5)
To break/expiry:
28 properties
(1)
(2)
(3)
(4)
(5)
3%
6.7yrs
Office areas only (i.e. excl. retail, basement space, gym, townhall etc.)
Cumberland Place (Phase 2)
Incl. incremental additional sq. ft. from Harcourt Square, Clanwilliam Court, Marine House, Earlsfort Terrace and Gateway (c.115k sq. ft. of office.) Note that there is also further
development potential at Gateway for c.130k sq. ft. of offices
Excl. arrangement with Iconic Offices in Block 1, Clanwilliam Court
ERV as per CBRE @ Mar 17. Note: CBRE assume c.€18.2m capex to achieve this ERV
5
Strategic priorities
Increase rental income
and duration
Delivery of development
projects and preparation
of pipeline of future
developments
Deploy capital into
selective acquisitions or
new developments
Maintain an efficient
balance sheet
(target LTV 20%-30%)
Recycle capital to
monetise gains and
enhance forward returns
Deliver improvements in
environmental efficiency
of portfolio
Good progress made in the year with more to come
6
Looking ahead
• Lots to come from portfolio in near term…
– 354k sq. ft. of offices being delivered through four schemes in next 18 months
o
Includes Hanover Building now added to committed schemes: 71k(1) sq. ft. to deliver by late 2018
– Acquired in-place portfolio is 24% reversionary and has 3.2 years to rent review/expiry
• …and longer term
– Pipeline of five further developments with potential to add up to 386k sq. ft. of net new office space
– 56% of pipeline already planning approved
• Irish economy remains strong, Brexit still an unknown
– Growth expectations raised
– Expect Brexit movers will start to make decisions on destinations in H2
• Hibernia well positioned
– Talented team
– Clear strategy
– €149.5m of cash and undrawn facilities(2)
Hibernia well positioned
(1)
(2)
59k sq. ft. offices, 12k sq. ft. gym
net of committed developments and anticipated repayment of 1WML facility
7
Agenda
Highlights
Financial results
Market update
Acquisitions and developments
Portfolio management
Conclusion and outlook
8
Financial highlights
Highlights
•
Strong NAV growth in H2 due to development activity and
new lettings
Letting activity and acquisitions have driven a substantial
uplift in net rental income and EPRA earnings
•
1.45c final dividend proposed taking total for year to 2.2c
•
Net debt increased to €155.3m, LTV of 13.3%
150c
EPRA NAV per share (cent)
•
EPRA NAV per share progression
146.3c
140c
130.8c
+52%
130c
120c
111.8c
110c
96.4c
100c
90c
Mar-14
Income statement
12 months to
31-Mar-16
39,681
25,389
56%
Reva l ua ti on ga i n
103,525
125,056
-17%
Net debt
Net profi t
118,586
136,797
-13%
Loa n to va l ue
14,989
5,124
193%
Net a s s ets
EPRA NAV per share (cent)
Net renta l i ncome
EPRA ea rni ngs (1)
(1)
Mar-16
Mar-17
Balance sheet
12 months to
31-Mar-17
(€’000)
Mar-15
% change
EPRA EPS (1)
2.2c
0.8c
193%
Dividend per share
2.2c
1.5c
47%
(€’000)
Portfol i o va l ue
31-Mar-17
31-Mar-16
% change
1,167,387
927,656
26%
155,257
52,918
193%
13.3%
5.7%
133%
1,013,852
896,574
13%
146.3c
130.8c
12%
(2)
Substantial uplift in recurring distributable income due to letting activity
(1)
(2)
12 months to Mar-16 figures excl. receipt of €4.9m (FBD surrender)
Including capex & acquisitions
9
EPRA NAV per share movement since 31 March 16
Strong uplift in EPRA NAV per share since 31 Mar 16
150
2.2
Valuation uplift: 14.9c
Cumberland
(Phase 2)
EPRA NAV cent per share
145
146.3
9.1c
(1.6)
1SJRQ
Cumberland(1)
140
1WML
+12%
Other
5.8c
South Docks
135
IFSC
130.8
Traditional
Core
130
Like-for-like in-place office valuation(2): +2.8%
All via ERV growth; negligible yield impact
125
Mar-16
(1)
(2)
Investment properties
reval.
Development properties
reval.
EPRA EPS
Dividends paid
Mar-17
Cumberland Phase 1 (completed refurbishment in Sep 16) and Phase 2 (potential additional 50k sq. ft. on front site) both included in development properties for the period. From 30 Sep 16,
Phase 1 is classified as investment property and Phase 2 remains as development property
Represents c.€440m of properties excl. Harcourt Square, 1DC, 2DC & Clanwilliam Court
10
EPRA earnings movement since 31 March 16
Significant uplift in EPRA earnings since 31 Mar 16 (€’000)
€25,000
€20,000
Acquisitions
current
year
Acquisitions
in in
current
year
€2,380
€2,380
Acquisitions
prior
year
Acquisitions
in in
prior
year
€7,160
€7,160
Lease
renewals
Lease
renewals
EPRA earnings ‘000
Lease
Lease
expiries
expiries
&&
other
other
Performance fee
Other admin
€9,720
€163
(€4,074)
€900
€900
(€720)
(€720)
(€3,911)
€15,000
€14,989
(€1,574 )
(€290 )
+50%
€5,920
€10,000
€10,024
+193%
€5,000
(€4,900 )
€0
Mar-16
(1)
Surrender
premium
New lettings
on completed
schemes
Lease events/
acquisitions
Admin costs
Net of income received i.e. Starwood promote fee (in ‘Other Gains & Losses’), which was net neutral for Hibernia
Finance costs
(net)
Other (1)
Mar-17
11
Substantial financial capacity in place
Hedged
€100m(1)
IPO
€372m
RCF
€400m
P+OO
€286m
Committed capex
€95m
Sources of funds
Hedged
€44m(2)
€44m
Remaining inv.
capacity
excl. DB debt
€150m
Net cash invested
€813m
Uses of funds
DB 1WML Debt
€44m
€0m
€200m
€400m
€600m
€800m
€1000m
€1200m
Current LTV of 13.3%: if RCF fully invested, LTV would be 28%(3)
(1)
(2)
(3)
€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)
Facility fully hedged per expected drawing schedule using interest rate caps with a 1% strike rate (reference rate is 3M Euribor)
Excl. 1WML facility
12
Forecast capital expenditure and LTV(1) for committed
development schemes
Forecast capital expenditure by financial year – committed developments
Project
€80m
€70m
Spent at
Mar-17
€m
Left to
spend
€m
1WML
€53m(2)
€34m(2)
€19m
1SJRQ
€58m
€14m
€44m
Two Dockland Central
€11m
€1m
€10m
(3)
Hanover Building
€22m
-
€22m
Total committed
€144m
€49m
€95m
Maintenance capex
25%
€10m
€1m
20%
€m of capital expenditure
€60m
€16m
€50m
20%
18%
15%
€1m
€14m
€40m
13%
€31m
10%
€30m
Expected LTV (%)
Est. total
capex
€m
€20m
€34m
€6m
€10m
5%
€19m
€13m
€0m
0%
To Y/E March 2017 (A)
1WML
(1)
(2)
(3)
1SJRQ
Y/E March 2018 (F)
Hanover Building
Y/E March 2019 (F)
Two Dockland Central
LTV (RHS)
LTV based on valuers’ estimates of GDV at Mar-17
Hibernia est. all in cost of 1WML on 100% basis is €77m (i.e. €24m all-in land cost (see slide 15) plus €53m total capex). Hibernia’s financial accounts show that the cost of acquiring 100% of
1WML was €36m which incl. the vendor’s 50% share of capex spent to date of acquisition of €13m. There was c.€28m of capex remaining (based on est. total capex of €53m) to be spent at
date of acquisition. Therefore, the total cost of the project is €77m (€36m + €28m + €13m = €77m)
€9.4m net of dilapidations received
13
Potential incremental rent roll from committed
developments and rent reversion
Based on CBRE estimated rental values, Mar 17
€75m
€72m
€1.4m
€64.0m
€65m
Vacant(2)
space
Potential
incremental
rent roll
€2.9m Hanover
€1.2m 2DC
€55m
Total contracted rent: €48.3m(1)
€2.1m
€2.1m
€44.1m
€45m
1WML
€6.4m
1SJRQ
+€27.9m
+63%
+€19.9m
+45%
1WML
2DC
€2.9m
1DC
Cumberland
€6.9m
Completed
developments
SOBO
€0.4m
€1.1m
Incremental Harcourt Square
€35m
€5.2m
€25m
€15m
Contracted in-place
rent roll at 31 Mar 17
Let
To let
Proforma
Committed
Vacant space(3)
In-place office
reversion(1,3)
Total potential
rent roll(3)
Substantial increase in rent roll expected as developments are let and from asset management
(1)
(2)
(3)
Excl. Iconic Offices arrangement in Brickhouse (Clanwilliam Court, Block 1)
Excl. Camden St. and space occupied by Hibernia in South Dock House. Incl. vacant parking at valuers’ ERV
At valuers’ ERV 31 Mar 17/ Valuers’ ERV assumes capex of €18.2m
Average office ERVs of ‘To Let’ space as per CBRE Mar 17:
•
1SJRQ:
€53.25psf (ground floor and above only)
•
Windmill Lane:
€50.70psf (excl. townhall)
•
2DC:
€52.35psf
•
Hanover:
€47.45psf
14
Potential development profits to come from committed
schemes(1)
Area post completion
(sq. ft.)
Scheme
Purchase price
(incl. costs)
(€m)
Est. total
capex
(€m)
Capex to spend at
Mar-17
(€m)
ERV(2)
€m
Office(3) (To Let)
€psf
1WML
Office:
Retail/Reception:
122k
13k
€24m(4)
€53m(4)
€19m
€7.3m(5)
€50.70
1SJRQ
Office:
Retail/Café/Amenity:
115k
6k
€18m
€58m
€44m
€6.4m
€53.25
2DC
Office:
73k(6)
€46m
€11m(7)
€10m
€4.1m(6)
€52.35
€21m
€22m(8)
€22m(8)
€3.0m(8)
€47.45(8)
€109m
€144m
€95m
€20.8m
Hanover
Building
Office:
Gym:
59k
12k
Total
Office:
Other:
369k(6)
31k
Sensitivity of development profits to come from committed schemes (excl. Hanover)(9)
Yield
Avg. ERV
Profit left to come based on valuers’ current yields/ERVs
(1)
(2)
(3)
(4)
(5)
(6)
5.75%
5.50%
5.30%
5.00%
4.75%
4.50%
€47.50psf
(€12m)
(€4m)
€3m
€14m
€25m
€37m
€50.00psf
(€3m)
€6m
€13m
€25m
€37m
€49m
€52.17psf
€4m
€13m
€20m
€33m
€45m
€58m
€55.00psf
€14m
€23m
€31m
€44m
€57m
€71m
€57.50psf
€22m
€32m
€41m
€55m
€67m
€82m
€60.00psf
€31m
€41m
€50m
€65m
€78m
€93m
€62.50psf
€41m
€51m
€61m
€76m
€90m
€104m
Assuming valuers’ estimate of GDV at Mar-17
(7)
Per valuers’ ERV at Mar-17 average
(8)
Office areas ground floor and above only
(9)
Refer to footnote (2) on slide 13
Incl. net residential rent at valuers’ ERV at Mar-17
57k sq. ft. of entire 2DC (73k sq. ft.) is refurbished space. ERV for
refurbished space only is €3.2m
€9.4m net of dilaps
Valuers’ ERV is based on assumption of capex budget of €13.8m vs. Hibernia expectation of €22m
At 31 March 2017 CBRE, the independent valuer, had an average estimated rental value for the unlet office space
(221,000 sq. ft.) in our three committed schemes at that point (1WML, 1SJRQ, Two Dockland Central) of €52.17psf and
were assuming an average yield of 5.30% upon completion: based on these assumptions they expect a further c. €20m
of development profit (ex. finance costs) to be realised through the completion and letting of the unlet space in these
schemes.
15
Key financial messages
• Strong financial performance
–
EPRA NAV +12% to 146.3c
–
Lettings increasing NRI (+56%(1) to €39.7m) and contracted rent
• Outperformance of targets generating performance fee payments
–
Absolute:
NAV per share growth >10%
–
Relative:
TPR of 14.5% vs IPD Ireland 11.2%
€2.6m fee
€3.3m fee
• Dividend increasing as earnings rise
–
1.45c final dividend proposed, 2.2c for the year
• Building management department fully operational
–
Small cost impact in year
–
In future intended to be net cost neutral but expect gross up revenue by €5m-€6m: no material impact on net
rental income
• Substantial financial capacity remains
(1)
–
Current LTV of 13.3%
–
Cash and undrawn facilities of €289m: €150m including committed capex and anticipated repayment of DB
facility
Excl. €4.9m surrender premium (31% incl. surrender)
16
Agenda
Highlights
Financial results
Market update
Acquisitions and developments
Portfolio management
Conclusion and outlook
17
Economic outlook
PMIs recovering after initial softening post UK referendum…
70
8
6
4
2
0
-2
-4
-6
-8
Brexit
vote,
Jun-16
65
60
55
50
50 = no change on previous month
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
Dec-14
Feb-15
Apr-15
Jun-15
Aug-15
Oct-15
Dec-15
Feb-16
Apr-16
Jun-16
Aug-16
Oct-16
Dec-16
Feb-17
45
Manufacturing PMI
Construction PMI
Source:
Services PMI
No change
Strong Irish employment fundamentals expected to remain…
2007 peak employment = 2.2m
2012 peak unemployment = 15.2%
2015
2016
2017F
2018F
Consumption
1.7%
4.5%
3.0%
2.6%
2.7%
Government
5.4%
1.1%
5.3%
2.5%
2.0%
Investment
18.2%
32.7%
45.5%
-20.9%
5.8%
14.4%
14.7%
2.3%
9.3%
9.9%
Domestic Demand
6.2%
11.2%
16.4%
-6.4%
3.6%
Core Domestic
Demand*
4.2%
5.4%
3.2%**
3.7%
3.7%
8.5%
26.3%
5.2%
4.1%
3.3%
Core investment*
GDP
…and Dublin continues to outperform
16%
Dublin
Rest of
country
Employment* (since 2010)
+11%
+7%
New FDI Jobs** (NET, since 2010)
+29k
+25k
Office employment* (since 2010)
+10%
+4%
Employed in same region as residence*
97%
83%
Population under 40yrs old*
52%
46%
14%
2.1m
12%
2.0m
10%
8%
1.9m
6%
Numbers in employment (LHS)
2020(f)
2019(f)
2018(F)
2017(f)
2016
2015
2014
2013
2012
2011
2010
2009
2008
4%
2007
1.8m
Source:
2014
Source: CSO, Goodbody
*excl. R&D and aircraft leasing
**estimate due to suppressed data on R&D and aircraft leasing by CSO in Q4 2016
Bloomberg/Markit
2.2m
…with healthy core domestic demand growth forecast
Unemployment rate (RHS)
CSO/EY/Oxford Economics/European Commission
*Source: CSO/Hibernia
**Source: IDA Ireland
18
Rental market: Dublin office dynamics
Overall Dublin vacancy rate now 7.0% with the grade A
vacancy rate at 3.1% in D2/4 (core CBD location)
47% of take-up* is for space less than 20k sq. ft.
14%
12%
10%
8%
6%
4%
2%
0%
>100k sq. ft.
12%
5k - 10k sq. ft.
17%
50k - 100k sq. ft.
16%
Dublin
1/3/7
Dublin
2/4
Dublin
6/8
IFSC
Overall vacancy rate
Source:
City
South North
West
Centre Suburbs Suburbs Suburbs
20k - 50k sq. ft.
25%
10k - 20k sq. ft.
17%
Grade A vacancy rate
Source: CBRE @ 31 Mar 17
*total gross take-up over the period Q1 2011 to Q1 2017
CBRE @ 31 Mar 17
Dublin office take-up of 2.6m sq. ft. in 2016
Occupier active demand remains broad based
3.0
Undisclosed
25%
2.0
Public
sector
3%
1.5
1.0
0.5
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Q1 2017
Millions Sq Ft
2.5
0.0
Annual Dublin office take up
Source:
< 5k sq. ft.
13%
CBRE @ 31 Mar 17
Financial
services
14%
10 Year Average
Source:
Other
22%
Active
demand
@ Sep 16:
2.7m sq. ft.
TMT
21%
Public
sector
4%
Professional
services
15%
Other
21%
Undisclosed
24%
Financial
services
13%
Active
demand
@ Mar 17:
3.8m sq. ft.
TMT
24%
Professional
services
14%
Cushman & Wakefield/Hibernia
Prime Grade A rents now €62.50psf on back of broad-based demand
19
Expected Dublin office development and
refurbishment supply
50% of anticipated supply in 2017 is pre-let, expecting lower completion in 2018 - 2020
3.5m
3.0m
CBRE 2016 take-up
= 2.6m sq. ft.
Potential sq. ft.
2.5m
2.0m
CBRE 10yr avg. take-up
= 1.9m sq. ft.
2.1m
1.8m
1.8m
1.5m
1.5m
CBRE 10yr avg. CBD take-up
= 1.3m sq. ft.
1.1m
1.0m
0.5m
0.2m
0.0m
2015 (A)
2016 (A)
2017 (F)
2018 (F)
2019 (F)
2020 (F)
Expected year of completion
Completed
Under construction
Probability weighted pipeline
Pre-let/let
Hib. all potential schemes(1)
Funding constraints likely to limit speculative development
Source: CBRE/Hibernia
(1) non-probability weighted
20
Investment market update
Real estate yields attractive relative to bonds
Investment volumes likely to move back towards long
term trend
15%
€5.0bn
Prime Dublin office yields
Ireland 10yr Government bond yield
German 10yr Government bond yield
Recent active funds
€4.0bn
10%
€3.0bn
360bps
5%
€2.0bn
€1.0bn
0%
Q1 1995
Q1 1996
Q1 1997
Q1 1998
Q1 1999
Q1 2000
Q1 2001
Q1 2002
Q1 2003
Q1 2004
Q1 2005
Q1 2006
Q1 2007
Q1 2008
Q1 2009
Q1 2010
Q1 2011
Q1 2012
Q1 2013
Q1 2014
Q1 2015
Q1 2016
Q1 2017
-5%
€0.0bn
Source:
CBRE/Bloomberg LP @ Mar 17
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1
2017
Office
Retail
Mixed use
Industrial
Residential
Other
Source:
CBRE @ Mar 17
Dublin prime office yields in a European context
Highlights
7%
• Spread between prime Dublin office yields and
government bonds remains very wide
6%
4.65%
5%
• Strong demand from international investors in Irish
real estate – expect investment volumes to normalise
4%
3%
• Prime Dublin office yields are attractive in a European
context
2%
Source:
CBRE @ Mar 17
Investment volumes expected to return towards long term trend
21
Agenda
Highlights
Financial results
Market update
Acquisitions and developments
Portfolio management
Conclusion and outlook
22
Summary of committed development schemes
Sector
Total NIA post Full purchase
completion (sq. ft.)
price
Capex/Est.
capex
Est. total cost
(incl. land) €psf
ERV(1)
Office ERV
psf(1)
Expected PC Date
Completed schemes in 12 months to 31 Mar 17
One Dockland
Central
Office
74k(2)
€46m
€10m(3)
€736psf(4)
€4.0m
€50.40psf
Completed in May 2016
SOBO Works
Office
11k
€2m
€1.3m
€275psf
€0.4m
€37.10psf
Completed in April 2016
1 Cumberland Place
Office
122k(5)
€51m
€31m
€668psf(6)
€6.9m
€51.05psf(7)
Completed in Sept 2016
207k
€99m
€42.3m(8)
Total completed
€11.3m
Committed schemes
Two Dockland
Central
Office
73k(9) office
€46m
€11m(10)
€765psf(4)
€4.1m
€52.10psf
Q3 2017
1WML
Office
122k office
7k retail
6k reception
14 resi. units
€24m(11)
€53m(11)
€557psf(7) €7.3m(12)
€51.95psf(7)
mid 2017
Hanover Building
Office
59k office
12k gym
€21m
€22m(13)
€680psf(7) €3.0m(13)
€47.40psf(13)
late 2018
Office
115k office
5k retail
1k amenity
€18m
€58m
€53.25psf
mid 2018
369k office
24k retail/gym
14 units
7k other
€109m
€144m(14)
CONCEPT IMAGE
1SJRQ
CONCEPT IMAGE
Total committed
(1)
(2)
(3)
(4)
(5)
Per CBRE valuation at 31 Mar 17
58k sq. ft. refurbished out of total 74k sq. ft.
€7.9m net of dilapidation charge received
Est. total cost psf. is net of dilaps
Excl. additional basement areas (7.5k sq. ft.) and
potential new block (c.50k sq. ft.) but incl. rentalised
reception (2k sq. ft.)
(6)
(7)
(8)
(9)
No cost attributed to basement area
Office demise only
€40.2m net of dilapidation charge received
57k sq. ft. is committed refurbishment of entire
73k sq. ft.
(10) €9.4m net of dilapidations charge received
€639psf(7)
€6.4m
€20.8m
(11) Refer to footnote (2) on slide 13 for workings
(12) Commercial (incl. reception/townhall) and residential
(13) CBRE valuation assumes capex of €13.8m vs. Company
planned capex of €22m. CBRE office ERV of €47.40psf
based on €13.8m capex
(14) €142.4m net of dilapidations charge received
23
Acquisition and committed development:
1WML
• Acquired full control with purchase of 50% interest from Starwood in December
2016 for €33m
• On budget and completion date brought forward to mid-2017
• Pre-let top two floors (35k sq. ft.) to Informatica on 17yr lease with 12yrs certain at
rent of €2.1m (€57.60psf)
• Large reception and townhall areas attracting tenants and part of focus on campus
approach with surrounding four Hibernia properties
24
Committed development:
1SJRQ
• 115k sq. ft. office development on schedule for
mid-2018 completion
• Good early tenant interest
• Part of SOBO campus – facilities to be shared
25
Committed development:
Two Dockland Central (formerly Guild House)
• Refurbishment of 57k sq. ft. in 2DC commenced in early 2017
− Estimated cost of €11m (€9.4m net of dilaps(1))
− Expected completion late 2017
• Pre-let 38k of the 57k sq. ft. (67%) under refurbishment:
− HubSpot to occupy 32k sq. ft. (2nd and 3rd floors) on two separate
19yr leases (break at 10.5yr) at a rent of €52.50psf (€1.8m p.a.)
− ENI to occupy 6k sq. ft. (4th floor) on a 20yr lease (break at 12yr)
at a rent of €55psf (€0.3m p.a.)
(1)
Dilaps received in FY 2016
26
Committed development:
Hanover Building
• Hanover Building redevelopment approved
• Full redevelopment and extension to create 73k sq. ft.:
o 59k sq. ft. Grade A office space
o Large 12k sq. ft. fitness centre on ground floor for use by whole
Hibernia campus
• Est. capex budget of €22m
• Expected start Q3 2017 and completion late 2018
• Completes Hibernia’s c.400k sq. ft. SOBO campus
27
Development pipeline
Current NIA
(sq. ft.)
Sector
NIA post
completion
(sq. ft.)
Full
purchase
price Comments
Near term
Office
Cumberland Place
(front block)
0k
c.50k
€0m(1) •
•
0k
c.50k
€0m
22k
>28k
Full planning approval received from DCC
Likely to be 2018 commencement
CONCEPT IMAGE
Total near term
Longer term
One Earlsfort Terrace
Office
€20m •
•
Harcourt Square
Office
117k on
1.9 acres
277k
€72m •
•
•
Blks 1, 2 & 5 Clanwilliam
Court and Marine House
Office
135k
c.190k
€80m •
•
Gateway
Total longer term
(1)
(2)
(3)
Logistics/Office 14.1 acres(2)
c.115k office(3)
274k
610k
€10m •
•
Planning permission is in place for two extra floors
which would add c.6k sq. ft. to the NIA
Potential for redevelopment as part of the wider
Earlsfort Centre scheme
Potential development of 277k sq. ft. of office space
and ancillary space
Full planning approval received
New 6yr lease granted to OPW until Dec 22
Longer term refurbishment/redevelopment
opportunity
Potential opportunity to add up to 40% to existing
NIA across all 4 blocks
Strategic transport location
Full or partial redevelopment potential subject to
planning
€182m
€51m (incl. costs) paid for existing block which was refurbished and completed in Sep 16. No land value attributed to new block at acquisition
Currently 178k sq. ft. of industrial/logistics
Planned new offices of c.115k sq. ft. plus potential to add a further c.130k sq. ft. of offices
28
Near term development:
Cumberland Place (Phase 2)
• Full planning received for 50k sq. ft. office block in front of
existing building
• Will take total area of Cumberland Place to c.180k sq. ft.
• Reception of existing building constructed with Phase 2 in mind
• Likely to start in 2018 once current committed schemes further
de-risked
29
Agenda
Highlights
Financial results
Market update
Acquisitions and developments
Portfolio management
Conclusion and outlook
30
Portfolio summary
Yield on Value %
Value as at
Mar 17
% of
(all assets) portfolio
% uplift since % uplift since % uplift since
Mar 16
Mar 16
acquisition
excl. new
incl. new
incl. new
acquisition(1) acquisition (1) acquisition (1)
Initial
Equivalent Reversionary
Passing Rent
(€m)
1. Dublin CBD Offices
Traditional Core
€439m
IFSC
€254m
South Docks
€177m
Total Dublin CBD Offices
2. Dublin CBD Office
Development
(5)
6.8%
29.6%
4.1%
22%
5.7%
5.7%
36.7%
3.7%
5.1%
5.3%
€9.9m
15%
3.1%
3.1%
31.7%
2.9%
5.3%
5.7%
€6.1m
€870m
75%
5.7%
5.7%
32.0%
3.7%
€168m
14%
45.8%
47.2%
86.7%
€116m
10%
2.6%
2.6%
23.7%
4.3%
4.6%
4.6%
€5.2m
€13m
1%
6.1%
6.1%
26.0%
6.2%
6.5%
6.8%
€0.7m
€1,167m
100%
8.5%
9.9%
36.8%
3.8%
(3)
(5)
5.3%
(5)
5.7%
(5)
6.9%
(2)
5.3%
(5)
38%
5.6%
(5)
€20.3m
€36.3m
(4)
3. Dublin Residential
4. Industrial
Total Investment Properties
(incl. offices)
(5.6)
5.2%
(5,6)
5.5%
(5,6)
€42.2m
Equivalent yields remain broadly stable
(1)
(2)
(3)
Includes capex in acquisition costs
Includes full value of 2DC in IFSC (even though under refurbishment)
Excludes the value of space occupied by Hibernia in South Dock House. Incl. full value of
Hanover Building
(4)
(5)
(6)
1 Cumberland Place in Traditional Core but value of site (Phase 2) in Dublin CBD Office
Development
Harcourt Square yield is the yield on the existing building (91% of property value)
Excl. all CBD office developments but includes Hanover and 2DC in CBD Dublin Offices
31
In-place office portfolio statistics
In-place office portfolio statistics
Contracted rent
Mar-15
Mar-16
€22.2m
+23%
€27.3m
Industry split of in-place tenants
Other
4%
Mar-17
+39%
€38.0m
Top 10 tenants of in-place portfolio (by contracted rent)
Insurance &
Reinsurance
2%
TMT
32%
Professional
Services
11%
17%
Remainder
33%
€38.0m
€38.0m
Banking &
Capital Markets
24%
13%
8%
3%
3%
Government
Agency
27%
4%
6%
4%
4%
5%
32
In-place office portfolio statistics (cont’d)
In-place office portfolio statistics
Contracted rent
(€m/€psf)
ERV
(€m/€psf)
WAULT to
review(1)
(yrs)
WAULT to
break/expiry
(yrs)
% of rent
upwards
only(2)
% of next rent
review cap
& collar
% of rent MTM(3)
at next
lease event
Acquired in-place office portfolio
€27.8m(€37psf)
€34.6m(€47psf)
3.2yrs
5.2yrs
38%
0%
62%
Completed office developments(4)
€10.2m(€49psf)
€10.4m(€50psf)
4.4yrs
10.7yrs
0%
83%
17%
Whole in-place office portfolio
€38.0m(€40psf)
€45.0m(€48psf)(5)
3.5yrs
6.7yrs
28%
22%
50%
Pre-let committed schemes(6)
€4.1m(€54psf)
€4.1m(€54psf)
5.3yrs
11.6yrs
0%
8%
92%
€42.1m(€41psf)
€49.1m(€48psf)
3.7yrs
7.2yrs
25%
21%
54%
Whole office portfolio
Lettings (esp. developments) significantly extending WAULTs
(1)
(2)
(3)
To earlier of review or expiry
Incl. small amount (<1%) of CPI linked
Mark to Market
(4)
(5)
(6)
Cumberland, SOBO, 1DC
CBRE assume c.€18.2m capex to achieve this ERV
2DC, 1WML
33
Office leases agreed since March 2016
Office leases agreed since Mar 16
Type
Tenant
Building
Term
Contracted
rent
€m
Contracted
rent
€psf
% of
Group
rent
To
expiry
To
break
Notes
Pre-let
1WML
€2.1m
€55.00psf
4%
17yrs
12yrs
•
€57.60psf incl. townhall
Pre-let
Two Dockland
Central
€1.8m
€52.50psf
4%
19yrs
11yrs
•
Lease expected to commence: August 2017
Pre-let
Two Dockland
Central
€0.3m
€55.00psf
<1%
20yrs
12yrs
•
Lease expected to commence: September
2017
Letting
Cumberland
House
€1.8m
€53.85psf
4%
25yrs
11yrs
•
Lease commenced in November 2016
Letting
One Dockland
Central
€1.6m
€50.00psf
3%
20yrs
11yrs
•
Lease commenced in July 2016
Letting
Central Quay
€0.6m
€52.50psf
1%
10yrs
3yrs
•
Lease commenced in April 2016
Letting
SOBO Works
€0.4m
€35.70psf(1)
<1%
13yrs(2)
6yrs
•
Lease commenced in April 2016
Letting
The Chancery
€0.2m
€37.20psf(3)
<1%
15yrs
7yrs
•
Lease commenced in June 2016
Letting
Harcourt Square
€1.1m(4)
€46.70psf
2%
6yrs
6yrs
•
Deed of renunciation signed giving certainty
on timing of vacant possession
Rent Review
Observatory
€0.5m(4)
€48.50psf
1%
10yrs
10yrs
•
Jan 2017 rent review agreed at €48.50psf.
Term extended by 5yrs to 2027 and break
option in 2017 removed
Arrangement
Clanwilliam Court
(Block 1)
N/A
N/A
N/A
•
See next page
Total
(1)
(2)
(3)
(4)
Average: stepped rent for 4yrs
Weighted average. Main office lease is for 15yrs
Incl. mezzanine area
Incremental rent
€10.4m
22%
34
Asset management:
Flexible workspace arrangement
• Five year arrangement with Iconic Offices occupying 21k
sq. ft. of Block 1, Clanwilliam Court
• Hibernia provides office and gets majority of rent up to
€45psf
• Iconic manages the operation and gets majority of rent
above this
• Gives Hibernia access to a different type of tenant and
insight into a fast growing area
Pictured: Iconic Offices at ‘The Brickhouse’, Clanwilliam Court (Block 1)
35
Agenda
Highlights
Financial results
Market update
Acquisitions and developments
Portfolio management
Conclusion and outlook
36
Conclusion and outlook

Strong performance in the year and plenty still to come from development programme

Positive economic backdrop in Ireland

Brexit decisions on destinations likely in H2

Hibernia well positioned with clear strategy, talented team and low leverage
Creating value through active management
37
38
Appendix
39
Location of portfolio
Dublin Overview(1)
Central Dublin portfolio(1)
Dublin
Airport
The Ward
Fairview
Park
Croke Park
M1
Portmarnock
N2/M2
Northwest
Business Park
M50
N3/M3
Ballymun
Northern
Cross
Sutton
Blanchardstown
Beaumont
Drumcondra
Castleknock
Kings
Inns
Howth
North Bull
Island
Clontarf
10
12 2
Phibsborough
N4/M4
Palmerstown
11
River Liffey
13 9
Dublin
CBD
8
17
7
1
Wyckham Point
2
New Century House
3
Gateway Site
4
Montague House
5
Hardwicke House
6
Chancery Building and
Chancery Apartments
7
Hanover Building
8
1WML
9
Observatory
10
Guild House (Two
Dockland Central)
11
One Dockland Central
12
The Forum
13
1SJRQ
14
Cumberland House
15
Harcourt Square
16
Dundrum View
17
Central Quay
18
One Earlsfort Terrace
19
Marine House &
Clanwilliam Court
N81
14
Ballsbridge
6
Kimmage
Clondalkin
N7/M7
Ballymount
3
Blackrock
St.
Stephens
Green
3
Rathfarnham
19
Dundrum
M50
1 &16
15
Tallaght
N11
5
4
18
Glenageary
M50
1
3
16
Wyckham Place
Gateway Site
Herbert
Park
Dundrum View
1 &16
Source: Google Maps, Visit Dublin, Jones Lang LaSalle
(1) Property assets > €5m in value as at 31 Mar 2017
Key:
Office
Residential
Industrial
Office development
40
Summary financial statements
Balance sheet highlights
Summary income statement
31-Mar-16(2)
Revenue
46,372
32,786
3,921
Renta l i ncome
42,519
32,786
13,604
14,977
Di rect property cos ts
(2,838)
(2,497)
Ca s h a nd ca s h equi va l ents
18,148
23,187
Property Income
39,681
30,289
Tra de a nd other recei va bl es
10,108
18,880
Performa nce rel a ted fees
(8,215)
(6,069)
Gross assets
1,209,632
988,621
Admi ni s tra tive expens es
(12,770)
(8,696)
Current l i a bi l i ties
(24,642)
(19,323)
Net fi na nce (cos ts )
(5,661)
(4,087)
Fi na nci a l l i a bi l i ties
(171,138)
(72,724)
Net rental profit
13,035
11,437
Net assets
1,013,852
896,574
Reva l ua tion/other i ncome:
Equi ty s ha re ca pi ta l
678,110
672,398
Inves tment properties
103,525
125,056
Reta i ned ea rni ngs
346,738
228,172
Other i ncome/ (cos ts )
2,476
(171)
Di vi dends pa i d
(20,755)
(10,132)
Ta x (expens e)/ credi t
(450)
475
Other res erves
9,759
6,136
Total revaluation/other income:
105,551
125,360
1,013,852
896,574
Profit for the financial period
118,586
136,797
IFRS NAV per share (cents)
147.9
131.6
Diluted IFRS EPS (cents)
17.2
20.1
Diluted IFRS NAV per share (cents)
146.3
130.7
EPRA Earnings
14,989
10,024
EPRA NAV per share (cents)
146.3
130.8
EPRA EPS (cents)
2.2
1.5
(€ in thousands)
31-Mar-17
31-Mar-16
1,167,387
927,656
385
Other non current a s s ets
Inves tment property(1)
As s ets hel d for s a l e
Total equity
(1)
(2)
(3)
12 mths to
12 mths to
31-Mar-17
(€ in thousands)
(3)
Prior year figures incl. 50% interest in Windmill Lane only
Figures inclusive of surrender premium (€4.9m)
Profits arising on disposal of non-core properties, development management & promote fees earned and fair value movements on shares issued
41
Expected Dublin office development and
refurbishment supply
Estimated development/refurbishment pipeline
3.5m
3.2m
3.0m
3.0m
CBRE 2016 take-up
= 2.6m sq. ft.
2.7m
2.6m
Potential sq. ft.
2.5m
2.0m
2.4m
CBRE 10yr avg. take-up
= 1.9m sq. ft.
2.1m
1.8m
1.7m
1.6m
1.5m
1.6m
CBRE 10yr avg. CBD take-up
= 1.3m sq. ft.
1.3m
1.1m
1.1m
1.0m
0.5m
0.0m
2016 @ 2016 @ 2016
Mar 16 Sep 16
2017 @ 2017 @ 2017
Mar 16 Sep 16
2018 @ 2018 @ 2018
Mar 16 Sep 16
2019 @ 2019 @ 2019
Mar 16 Sep 16
Expected year of completion
Completed
Source:
Hibernia/CBRE estimates
Under Construction
Planning Granted
Planning Applied
2020 not
analysed
at Mar 16
Pre-Planning
2020 not 2020
analysed
at Sep 16
Pre-let
42
Schedule of rent reviews(1) for in-place office tenants
Current in-place office contracted rent: €38.0m
To earlier of rent review or lease expiry
€12.0m
Valuers' ERV @ 31 Mar 17
Avg. rent: €47psf
€10.0m
Contracted Rent
€8.0m
Avg. rent: €34psf
€6.0m
Avg. rent: €30psf
Avg. rent: €38psf
€4.0m
Avg. rent: €47psf
Avg. rent: €52psf
Avg. rent: €25psf
Avg. rent: €31psf
€2.0m
Avg. rent: €44psf
€0m
Six months Sep-17
ended
Avg. rent: €26psf
Mar-18
Sep-18
Mar-19
Sep-19
Mar-20
Sep-20
Mar-21
Sep-21
Mar-22
Weighted average period to rent review or lease expiry of 3.2yrs excl. completed developments(2)
(1)
(2)
(3)
To earlier of rent review or lease expiry. Excludes various parking licenses, retail space in office buildings, Parkrite in the Forum/Clanwilliam, Crossfit, Roof Antenna & AIB ATM. Also excludes
any rent review dates or expiries prior to Mar 17
i.e. the ‘acquired in-place office’ portfolio
Note: Harcourt Square lease (€6.1m) expiry in Dec-2022 (y/e Mar-23) is excluded from the chart as well as current rent reviews
43