Hibernia REIT plc (“Hibernia”, the “Company” or the “Group”) today announces preliminary results for the financial year ended 31 March 2020.

1) Business update & outlook

• 93.5% of commercial rent for quarter ended Jun-20 now received, with 3.5% deferred, 2% due in June and 1% outstanding (same time last quarter 100% collected, same time in prior year 100% collected)
• 97% of residential rent for month of May-20 now received (prior months 99% or above)
• Our managed buildings have remained open and accessible as required throughout the COVID-19 lockdown
• We have prepared our buildings for increasing usage as the lockdown eases with individual building plans covering access control, physical distancing measures, cleaning/sanitising and signage
• 2 Cumberland, our sole active development site, reopened on 18 May: completion now expected by end of 2020
• Mark Pollard, our Director of Development, is retiring at the end of June with Gerard Doherty promoted to the role
• Market outlook negative in near term, with the full impact of the COVID-19 crisis on rental and capital values yet to be felt

2) Highlights for the financial year

Portfolio returns outperformed the market, driven by developments

 

• Portfolio value of €1,465.2m^[1], up 2.0%^[2] in the financial year and up 1.4%² in H2.  On the same basis but excluding the increase in stamp duty, the portfolio value rose 3.5% in the financial year and 2.9% in H2
• Per RICS guidance, the independent valuer has included a material uncertainty statement in its Mar-20 valuation
• 12-month Total Property Return^[3] of 5.9% vs MSCI Ireland Property All Assets Index (excl. Hibernia) of 4.4%
• EPRA NAV per share⁴ of 179.3 cent, up 3.5% in the year (5.3% excl. stamp duty increase) and up 2.0% in H2

Further strong increase in distributable income from growing rent roll and reduced costs

• Annual contracted rent of €65.7m at Mar-20, up 14.1% since Mar-19, and office WAULT of 6.4yrs, down 15%

–          Seven new lettings totalling 93,000 sq. ft. added €5.7m (on average 9% ahead of last net ERV)

–          Nine rent reviews completed on 99,000 sq. ft. added €2.7m (on average 2% ahead of ERV at review)

–          EPRA like-for-like net rental growth⁴ of 3.9%

• EPRA EPS⁴ of 5.5 cent, up 39.9% on last year (2019: 4.0 cent)
• Diluted IFRS EPS of 8.8 cent, down 49.8% on last year due to lower revaluation gains (2019: 17.6 cent)
• Final dividend of 3.0 cent per share, bringing total for the financial year to 4.75 cent, up 35.7% (2019: 3.5 cent)

Good progress made in de-risking our one active development and advancing our pipeline schemes

• 2 Cumberland Place expanded by 13% to 58,000 sq. ft. of offices and 24,000 sq. ft. pre-leased to 3M in Apr-20
• Development pipeline, which comprises seven potential schemes, expanded and progressed

–          Office pipeline grew 5% to 566,000 sq. ft. after new planning grants at Harcourt Square and Clanwilliam

–          Addition of 6.8 acres of industrial land acquired, expanding mixed-use pipeline by 5% to 154.3 acres

Effective recycling of capital

• Net sales proceeds in FY19 of €60.3m have been reinvested or returned to shareholders

–          €23.3m invested in nine acquisitions, seven of which were ‘bolt-on’ in nature

–          €21.3m capital expenditure on developments

–          €25.0m share buyback programme completed: 17.6m shares bought and cancelled (avg. price of 142.3 cent)

• Capital reorganisation to improve future flexibility effective Apr-20: €50m moved to distributable reserves

Leverage amongst the lowest in the European REIT universe and no debt maturities until Dec-23

 

• Net debt of €241.4m, LTV⁴ of 16.5% (2019: €217.1m, LTV⁴ 15.6%)
• Weighted average debt maturity of 4.4 years (2019: 5.4 years)
• Significant covenant headroom at Mar-20: can withstand 65% fall in asset values and 76% fall in underlying EBIT
• Cash and undrawn facilities of €154m, €136m net of committed expenditure (2019: €178m and €143m, respectively)

 

Kevin Nowlan, Chief Executive Officer of Hibernia, said:

“As Ireland starts to emerge from lockdown, our top priority remains the safety of our staff, tenants and suppliers and we will continue working closely with all our stakeholders.

“Our results for the year to March 2020 were strong, with our portfolio returns outperforming the Irish market, helped by our office developments. In addition, our EPRA earnings per share increased 40% thanks to a combination of rental income growth and cost savings, and we are increasing our full year dividend by over 35%, in line with the requirements of the Irish REIT regime. 

“We have also made good progress with our other strategic objectives: our sole active development, 2 Cumberland Place, is now significantly de-risked, our development pipeline has grown thanks to new planning permissions and acquisitions, and we have successfully recycled the proceeds of the net sales we made last year. We are pleased to have appointed a Sustainability Manager to focus on delivering further, measurable improvements to our sustainability performance.

“The full impact of the COVID-19 pandemic on market rents and property values is yet to be felt but we are well positioned to withstand it. We have amongst the lowest leverage in the European REIT universe, no debt maturities until December 2023, and a high-quality tenant base weighted towards the technology sector and state entities. The impact on our rent collection levels to date has been modest and we are working collaboratively with any tenants who are having difficulties. We believe the current crisis is underlining the importance of city centre offices as places for employees to work together and exchange information and ideas and we remain confident in the long-term prospects of the central Dublin office market and the Dublin residential market and will continue to manage the business accordingly.”