HALF YEARLY FINANCIAL REPORT

For the six month period to 30 September 2019

 12 November 2019

Hibernia REIT plc (“Hibernia”, the “Company” or the “Group”) today announces interim results for the six months to 30 September 2019. Highlights for the period:

Steady portfolio performance

  • Portfolio value of €1,423.7m[1], up 0.6%[2] in the period (active developments up 4.5%2)
  • Six-month total property return[3] of 2.4% vs MSCI Ireland Property Index (excl. Hibernia) of 3.1%
  • EPRA NAV per share4 of 175.7 cent, up 1.4% in the period (March 2019: 173.3 cent)

Strong growth in distributable income from increasing rent roll and reduced costs

  • Annual contracted rent of €62.0m, up 7.6% since March 2019, mainly due to net new lettings and rent reviews
  • EPRA like-for-like net rental growth4 of 9.1% in the period
  • Net rental income of €28.6m, up 7.3% on the same period last year (September 2018: €26.6m)
  • Operating cost savings of €4.7m versus prior year period following expiry of IMA in November 2018
  • EPRA EPS4 of 2.8 cent, up 55.6% on the same period last year (September 2018: 1.8 cent)
  • Interim dividend declared of 1.75 cent per share, up 16.7% on prior year (2018: 1.5 cent)

Further rental growth potential in the near term

  • Unlet space with ERV of €7.8m (March 2019: €8.0m): office vacancy of 12% by area (March 2019: 12%)
  • 2 Cumberland Place development due to complete in Q3 2020 (ERV: €3.2m)
  • Reversionary potential of portfolio of €1.1m with avg. period to capture of 2.6 years for in-place CBD offices

Disciplined capital allocation continues

  • Net sales proceeds in FY19 of €60.3m are being reinvested or returned to shareholders

–          €17.6m invested in five acquisitions, three of which were “bolt-on” in nature

–          €9.3m invested in capital expenditure on developments in the period

–          €25m share buyback launched in April 2019 and completed on 11 November 2019: 17.6m shares bought back and cancelled at an average price of 142.3 cent per share

Good progress with committed development and longer-term pipeline

  • 2 Cumberland Place expanded by 12% to 56,000 sq. ft. of new Grade A offices: Q3 2020 completion now expected
  • Longer-term pipeline being expanded and progressed and now comprises seven potential schemes

–          Provisional planning granted for 152,000 sq. ft. redevelopment of Clanwilliam Court, subject to appeal

–          Addition of Malahide Road: 3.8 acre industrial site with mixed-use potential in longer term

Robust balance sheet

  • Net debt4 at 30 September 2019 of €221.5m, LTV4 of 15.6% (March 2019: €217.1m, LTV4 15.6%)

–          Weighted average debt maturity at September 2019 of 4.8 years (March 2019: 5.4 years)

  • Significant funding capacity: cash and undrawn facilities of €173.5m, €133.3m net of committed expenditure

Improving sustainability performance

  • Three star GRESB rating in 2019, with score +17pp on prior year
  • Full-time Sustainability Manager joining in January 2020

Tax changes announced in Budget 2020 and effective 9 October 2019 (post period end)

  • Increase in stamp duty on commercial property transactions from 6% to 7.5%: if effective as at 30 September 2019 it would have reduced portfolio value by an estimated €22m and EPRA NAV per share by an estimated 3.3 cent
  • For details on the other changes and their potential impact, please see the Financial Review section of this release

Kevin Nowlan, Chief Executive Officer of Hibernia, said:

“We have made good progress in the first half of the financial year, with net new lettings and rent reviews enabling us to increase our contracted rent roll by 8% to €62m, and EPRA earnings growing by 50% versus the same period last year. With €11m of potential incremental rent (per our independent valuer) to come from leasing the remaining available space in the existing portfolio and our 2 Cumberland Place development, there is a significant opportunity for us to grow our income further in the near term and this remains a high priority for us.

“We are also working hard to unlock the value within our development pipeline, with the key achievements in the period being the grant of planning to expand our 2 Cumberland Place scheme and the preliminary planning permission received for the redevelopment of Clanwilliam Court, which is subject to appeal.  In addition, we have made a number of small bolt-on acquisitions, expanding and improving our pipeline.

“Whilst Ireland continues to have one of the fastest growing economies in the EU, business and consumer sentiment have softened in recent months, consistent with global trends.  We have also seen some evidence of smaller occupiers deferring decisions on leasing space given the current geopolitical uncertainty.  Nonetheless, overall tenant demand for offices and apartments in Dublin remains high and job creation from foreign direct investment is near record levels.

“It remains to be seen how the Irish property investment market reacts to the tax changes announced by the Government in the recent Budget.  Our business has low leverage, a talented team and an exciting pipeline of potential development projects and we are well-positioned to take advantage of whatever opportunities arise.”

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