For the six-month period to 30 September 2018 - Hibernia REIT
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Half yearly financial report
For the six-month period to 30 September 2018
13 November 2018
Hibernia REIT plc (“Hibernia”, the “Company” or the “Group”) today announces its interim results for the six
months to 30 September 2018. Highlights for the period:
Portfolio returns outperforming Dublin market, assisted by development programme
• Six-month total property return1,4 of 5.9% vs IPD Ireland Index of 4.4%
• Portfolio value of €1,329.9m, up 3.9%2 in the period (developments up 11.9%2,3)
• EPRA NAV4 per share of 166.3 cent, up 4.5% in the period
• Net rental income of €26.6m, up 21.5% on prior year (September 2017: €21.9m)
• Profit before tax of €64.0m including revaluation surplus (September 2017: €70.6m)
• EPRA EPS4 of 1.8c, up 38.5% on prior year (September 2017: 1.3c)
Further profitable recycling of capital into new opportunities
• Sales proceeds of €55.6m generated in the period
o Sale of New Century House for €65.3m, modestly ahead of March 2018 value
o €9.7m of acquisitions including 5.8 acres at Gateway, 129 Slaney Road and 50 City Quay
• Since 30 September 2018 a further €27m spent (initial consideration) acquiring 92.5 acres of land
neighbouring Hibernia’s existing interests at Gateway (Newlands): Hibernia’s total holding now 143.7 acres
De-risking current developments and growing longer-term pipeline
• Three committed schemes in progress totalling 222,000 sq. ft. of Grade A offices, now >50% let
o 1SJRQ and 2WML (172,000 sq. ft.) both delivering shortly: 1SJRQ offices fully let
o Cumberland Place Phase II (50,000 sq. ft.) expected to complete in H1 2020
• Longer-term pipeline enhanced and now comprises five schemes
o Newlands land holding increased 217% to 143.7 acres through acquisitions
o 129 Slaney Road, a 3.8-acre industrial unit with potential for future rezoning to mixed use, acquired
o Office pipeline grown by up to 8% to 543,000 sq. ft.5 following provisional planning grants
Contracted rents and portfolio WAULT at record levels following 1SJRQ letting
• Following letting of 1SJRQ to HubSpot, annual contracted rent roll4 now €60.9m and “in-place” office portfolio
WAULT to earlier of break / expiry now 7.7 years, up 9% and 5% since March 2018, respectively
• Acquired “in-place”6 CBD offices have average rents of €41psf, reversionary potential of 20% and an average
period to earlier of rent review or expiry of 2.5 years
o Nine office rent reviews active representing €2.5m of passing rent and with ERV of €4.5m
Low leverage and substantial undrawn facilities for investment
• Net debt4 at 30 September 2018 of €163.9m, LTV4 of 12.3% (March 2018: €202.7m, LTV 15.5%)
• Cash and undrawn facilities of €236.1m, €150.1m net of committed developments and Newlands acquisition
• Expect to diversify sources of debt funding and lengthen average debt maturity in the near term
Continued growth in dividend
• Interim dividend declared of 1.5 cent per share, up 36.4% on prior year (2017: 1.1 cent)
• Expect further growth from increase in rental income (from letting up developments and capturing reversion)
and reduction in overheads (end of IMA in November 2018)
1
Total property return is the return of the property portfolio (capital and income) as calculated by MSCI, the producers of the IPD Ireland Index
2 On a like-for-like basis
3 Developments comprise 1SJRQ, 2WML and Cumberland Phase 2
4 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
5 Post completion
6 Excludes refurbishment and development projects
1Kevin Nowlan, Chief Executive Officer of Hibernia, said:
“It has been a successful six months for Hibernia. Our portfolio returns have continued to outperform the market
and we have made good progress with our committed developments and our pipeline of future schemes. With the
letting of 1SJRQ to HubSpot we have de-risked over half our current development programme and our contracted
rental income and average lease duration have grown to record levels. We continue to recycle capital into assets
which we believe will enhance our future returns: in particular we are excited by the potential at Newlands Cross,
where we now control 143.7 acres of land.
“Hibernia is approaching five years in existence and I am delighted by the progress we have made in that time.
Our portfolio now exceeds €1.3bn in value and our contracted rent roll is over €60m: following the letting of 1SJRQ
over half of our contracted rent comes from buildings we have delivered or repositioned. With the expiry of the
original Investment Management Agreement in late November 2018 we expect a significant reduction in on-going
costs.
“We look to the future with confidence: there is a high level of demand for office and residential space in Dublin,
both from tenants and investors, and the Irish economy is growing strongly. Our portfolio is rich in opportunity,
we have flexible low-cost funding in place and a talented team.”
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@murraygroup.ie
Jill Farrelly: +353 87 738 6608, jfarrelly@murraygroup.ie
About Hibernia REIT plc
Hibernia REIT plc is an Irish Real Estate Investment Trust ("REIT"), listed on Euronext Dublin and the London Stock
Exchange. Hibernia owns and develops property and specialises in Dublin 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 Dial-In: 01 691 7842
UK Dial-In: +44 (0) 20 3936 2999
Netherlands Dial-In: +31 (0)85 888 7233
United States Dial-In: +1 (0)1 845 709 8568
Access Code: 606157
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.
2Market Review
General economy
Ireland is expected to be among the best performing economies in the euro area again in 2018, as employment
levels continue to grow (source: CBI, ESRI). Department of Finance forecasts, released in October with Budget
2019, increased GDP growth expectations to 7.5% and 4.5% for 2018 and 2019, respectively, up from 5.6% and
4.0% previously. Core domestic demand growth, probably a fairer assessment of the health of the economy, has
been revised upwards to 6.0% (from 4.8%) for 2018 and is expected to be 4.4% in 2019 (source: Goodbody). With
nearly 2.3m people in work nationwide, the highest ever level (source: ESRI, CSO), the unemployment rate has
continued its downward trajectory. At the end of Q3 it stood at 5.4% nationally and 5.2% in Dublin, with
projections for sub-5% unemployment nationally by 2019, marking a return to practical full employment (source:
CSO, CBI). As employment levels have increased so too have wages, which are expected to grow 2.5% for the
year (source: Goodbody) and may accelerate in future years as the employment market tightens. Inflation is also
expected in the construction sector, with tender prices forecast to increase by over 7% in 2018 (source: SCSI).
The Government has announced that it intends to run a balanced budget in 2019, the first time in a decade. Debt
reduction remains a key priority: the 2018 debt to GDP forecast of 64% is set to reduce further to 61% by the end
of 2019 (source: Dept of Finance). Capital spending, following an expected 29% increase in 2018, is forecast to
increase by a further 25% in 2019 to facilitate increased investment in the infrastructure projects outlined in the
National Development Plan (source: Dept of Finance, Goodbody).
While the overall economic picture remains positive, global risks, which have the potential to disrupt Ireland’s
continued economic success, have increased and have led the IMF to downgrade its forecast for global economic
growth for 2018 by 0.2% to 3.7%. Among these, the risk of a disorderly Brexit, trade wars and a slowdown in the
US economy rank particularly highly for Ireland. For the moment however, FDI into Ireland remains strong:
announced IDA-sponsored jobs created grew by 15% to 8,000 in 2017, with a further 6,000 being announced in
the first nine months of 2018. Dublin continues to benefit substantially from these additions, as around 50% of
jobs created went to the capital. (source: Davy, IDA).
Irish property investment market
In the 12 months to 30 September 2018 the IPD Ireland Property Index delivered a total return of 6.3% (vs 6.6%
in 12 months to 31 March 2018): the “other commercial” sector, which includes multi-family residential, was the
top performer in the 12 months to September 2018 with total return of 17.5% versus offices at 6.2% and industrial
property at 8.2%. The capital growth in the office sector in the IPD Ireland Index of 1.7% in the 12 months to 30
September 2018 came from ERV growth and yield compression in broadly equal measure. Despite a large office
transaction (of over €160m) in the North Docks at a yield below 4% in the period, consensus among the major
agents is that prime office yields remain in the 4 - 4.25% range. Similarly, yields on prime residential assets are
also at 4%, though further tightening is expected (source: CBRE).
Total investment volumes for 2018 are forecast to exceed €3bn, and by the end of Q3 2018 were already in line
with volumes for the whole of 2017 at €2.6bn (source: JLL). Foreign investors continue to dominate, accounting
for 78% of transactions thus far in 2018 (source: JLL). As the table below shows, eight out of the top 10 office
transactions in 2018 have been to foreign buyers. Dublin offices represented 45% of total investment in the first
nine months of 2018 and the residential private rented sector (“PRS”) has continued to attract attention with 27%
of total investment (source: Knight Frank). With estimated demand of €4bn for the PRS, investment in this sector
is expected to continue to rise as construction activity increases (source: Knight Frank).
3Top 10 office investment transactions (nine months to Sep-18)
Building Price Price psf Buyer Buyer nationality
1 & 2 HSQ, D8 €175m €802psf CK Properties Ltd Hong Kong
No.1 Dublin Landings, D1 €164m €1,146psf Triuva Germany
Dublin office asset swap,
D1 & D2 €160m n/a IPUT/State Street Ireland/USA
The Beckett Building, D3 €101m €532psf Kookman Bank South Korea
Belfield Office Park, D4 €90m €308psf Spear Street Capital USA
New Century House, IFSC €65m €818psf Credit Suisse Switzerland
The Sharp Building, D2 €56m €1,260psf Credit Suisse Switzerland
One & Three Gateway, D3 €29m €306psf Yew Grove REIT Ireland
31-36 Golden Lane, D8 €26m €823psf KGAL Germany
Two Haddington Buildings, D4 €24m €846psf Quadoro Doric Germany
Source: Knight Frank
Office occupational market
Following a record 3.6m sq. ft. of leasing in 2017, tenant activity in the Dublin office market has remained high in
2018: in the nine months to September 2018 take-up was 2.2m sq. ft., 67% of which was in the city centre (source:
Knight Frank). At 30 September 2018 there was also more than 2.1m sq. ft. of office stock reserved (source: CBRE)
which suggests that the high levels of take-up should continue in the near term, as does the volume of active
demand, which although down on the previous (record) quarter, still stands at c. 5.3m sq. ft. (source: Cushman &
Wakefield). Technology companies continue to be the largest takers of space, having a 39% share in the first nine
months of 2018, with professional services and the public-sector accounting for 9% and 11%, respectively (source:
Knight Frank). The footprint of serviced office/flexible workspace operators in the city continues to expand,
accounting for 12% of take-up in the year-to-date (source: Savills, CBRE). The serviced office sector currently
represents 2.5% of Dublin’s CBD office stock excl. Georgian offices (source: Knight Frank), below London (4.0%)
and Amsterdam (6.3%), two of the most developed serviced office markets in Europe. Excluding Amsterdam and
London, the European average is generally less than 1% (source: Cushman & Wakefield).
While the Dublin office market has garnered a 25% share of Brexit relocation announcements from London thus
far (source: Knight Frank), a large proportion have not resulted in letting activity yet. Domestic and US
headquartered occupiers continue to be the main takers of office space in Dublin. The top 30 lessors in the Dublin
market in the nine months to September 2018 accounted for 66% of total take-up: domestic occupiers accounted
for 22% of this total and US headquartered entities accounted for 67%. (source: Knight Frank). The “latent Brexit”
by US technology companies we described at the time of our preliminary results in May 2018 has had a larger
impact on the Dublin office market thus far than relocations from the UK and Knight Frank believes that the largest
positive impact of Brexit on the Dublin office market will be from the technology sector, given its reliance on
drawing skilled workers from around the world.
While Q3 2018 saw a return to more traditionally-sized leasing deals, with no deals greater than 100,000 sq. ft.
signed (source: CBRE), the previous two quarters saw several large transactions. Since the period end, Facebook
has agreed to lease the existing 500,000 sq. ft. of office space at the AIB Bank Centre in Ballsbridge, D4 plus the
additional 350,000 sq. ft. which is due to be supplied there by 2021. Three further large deals, which total c.
650,000 sq. ft. of North Docks office space, are expected to sign in the near term, boding well for 2018 full year
take-up statistics. The top 10 Dublin office lettings in the first nine months of 2018, which accounted for 37% of
total take-up are set out in the table below:
4Top 10 office lettings (nine months to Sep-18)
% of total take-
Tenant Industry Building Area (sq. ft.) up
Google TMT Bolands Quay, D2 221k 13%
IDA State Three Park Place, D2 112k 7%
WeWork Serviced offices No.2 Dublin Landings, D1 100k 6%
WeWork Serviced offices One Central Plaza, D2 74k 4%
Google TMT One Grand Canal Quay, D2 58k 3%
Google TMT The Chase Building, D18 53k 3%
WeWork Serviced offices 5 Harcourt Road, D2 49k 3%
Google TMT Blackthorn Building, D18 49k 3%
TMT tenant TMT 1WML, D2 48k 3%
Perrigo Pharma The Sharp Building, D2 45k 3%
Source: Knight Frank
The overall Dublin office vacancy rate at the end of Q3 2018 was 6.7% vs. 6.2% at March 2018 and the Grade A
vacancy rate in the city centre (where all of Hibernia’s office portfolio is located) was 5.3% at the end of Q3 2018
vs. 4.0% at March 2018. The primary reason for the increase in these vacancy rates was the completion of the
Seamark Building in Elm Park, Charlemont Exchange and 5 Hanover Quay (source: Knight Frank). Savills estimates
that prime headline rents have increased by approximately 5% in 2018, though they and CBRE are in agreement
that prime rents have remained stable at the €65 per sq. ft. mark in Q3.
Office development pipeline
The table below outlines our expectations for upcoming supply across Dublin’s city centre and for the whole of
Dublin by year. Overall we expect a total of 10.9m sq. ft. gross new space between 2016 and 2021, of which 71%
will be in the CBD.
Year City centre supply All Dublin supply
2016 1.0m sq. ft. 1.1m sq. ft.
2017 0.9m sq. ft. 1.4m sq. ft.
2018f 1.7m sq. ft. (83% pre-let) 2.3m sq. ft. (70% pre-let)
2019f 1.0m sq. ft. (58% pre-let) 1.6m sq. ft. (45% pre-let)
2020f 2.0m sq. ft. (24% pre-let) 2.3m sq. ft. (21% pre-let)
2021f 1.1m sq. ft. (0% pre-let) 2.2m sq. ft. (16% pre-let)
Total 2016-21 7.7m sq. ft. 10.9m sq. ft.
The active pre-letting/mid-letting market has continued with over one-third of all letting deals signed in 2018 of
this nature (source: CBRE): major pre/mid-let deals include WeWork, Iconic Offices, Facebook and HubSpot.
Residential sector
Housing delivery continues to increase with 19,271 new homes delivered in 2017 and a further 17,500 and 22,000
units expected to complete in 2018 and 2019, respectively (source: Rebuilding Ireland/Government of Ireland &
CBI). These completion figures, coupled with a 52% year-on-year increase in planning permissions granted in Q2
52018, is evidence that progress is being made in terms of housing supply (source: Davy). Despite this apparent
improvement in housing provision, overall 2018 supply is expected to lag housing demand by around 50% (source:
Goodbody). House price inflation appears to be reflecting the increase in supply and mortgage limits, running at
5.9% for the year to September nationwide and 2.5% in Dublin (source: Davy).
The expected introduction of the Land Development Agency (“LDA”), to facilitate better use of land held by state
bodies, should assist in bringing further supply to the market in due course. The LDA will work with public and
private sector land owners to unlock key sites with a focus on the overall public interest in determining land use.
The agency aspires to deliver 150,000 units over the next 20 years and, pre-establishment, has secured lands
capable of delivering 3,000 homes.
Although supply is increasing, the fundamentals of the market continue to attract institutional investors and as
noted in our investment market commentary above, investor demand far outweighs current supply.
Business review
Acquisitions and disposals
We have continued to recycle capital into new opportunities, generating net disposal proceeds in the six months
to 30 September 2018 of €55.6m (€54.6m including transaction costs) (six months to 30 September 2017: nil)
from the disposal of New Century House and several small acquisitions. Since 30 September 2018 we have made
a further acquisition for €27m excluding transaction costs.
Disposals
• New Century House, IFSC: contracts were exchanged in July 2018 for the sale of the 80,000 sq. ft. office
building. The price of €65.3m was modestly ahead of the March 2018 valuation and equated to a net
initial yield of 4.0%. The ungeared IRR for Hibernia since acquisition in 2014 was in excess of 12%. The
sale completed as expected in September 2018
Acquisitions
• 129 Slaney Road, D11: the 62,000 sq. ft. industrial property on a 3.8 acre site in the Dublin Industrial
Estate was bought for €4.8m in July 2018. The property is fully let, producing rent of €0.5m per annum,
with a WAULT of 8.5 years to expiry and a WAULT to break of 1.9 years. We believe the property has
potential for a future mixed-use development (see further details in the Developments section below)
• 50 City Quay, D2: the 4,500 sq. ft. office building, which neighbours 1SJRQ and faces onto the River Liffey,
was acquired for €2.7m in July 2018. The property, which is vacant and in need of refurbishment, expands
the Windmill Quarter to six buildings with c. 400,000 sq. ft. of office accommodation, when complete, as
well as retail and leisure facilities
• Newlands lands, D24: an additional 5.8 acres of land at Newlands Cross was acquired in August 2018 for
€1.7m. The land is currently zoned for agriculture and adjoins the 31.3 acres acquired by Hibernia in 2017
for €6.0m (See further below)
Acquisitions post 30 September 2018
• Further Newlands lands, D24: A further 92.5 acres of land at Newlands Cross was acquired in November
2018 for initial consideration of €27m, plus potential deferred consideration based on receiving a 44%
share of the market value of all lands upon rezoning, less the initial consideration. The land is also zoned
for agricultural use and adjoins Hibernia’s existing holding. Following this acquisition Hibernia’s property
interest in the Newlands Cross area totals 143.7 acres (see further details in the Developments and
Refurbishments section below)
6Portfolio overview
As at 30 September 2018 the property portfolio consisted of 33 investment properties valued at €1,330m (31
March 2018: 32 investment properties valued at €1,309m), which can be categorised as follows:
Value as at % of Passing rent12 Contracted rent12 ERV12
Sep 18 portfolio Equivalent yield €’m €’m €’m
1. Dublin CBD offices
Traditional core €447m 34% 5.2%2 €21.6m €21.6m €25.0m
IFSC €204m 15% 4.8% €10.3m €10.3m €11.1m
South Docks €334m3 25% 4.8% €14.0 €15.4m €18.1m
Total Dublin
CBD offices €985m 74% 5.0%2 €45.9m €47.3m €54.2m
2. Dublin CBD
office
development4 €173m 13% – – €6.8m €13.0m10
3. Dublin
residential5 €148m 11% 4.0%6 €5.6m9 €5.6m €6.8m11
4. Industrial €24m 2% 4.4%7 €1.1m €1.3m €1.3m
Total €1,330m 100% 4.8%2,6,8 €52.6m9 €60.9m €75.3m
1. Yields on unsmoothed values and excluding the adjustment for South Dock House owner-occupied space
2. Harcourt Square yield is the yield on the total value which includes residual land value
3. Excludes the value of space occupied by Hibernia in South Dock House
4. Includes 2WML, 1SJRQ & Cumberland Place Phase 2
5. Includes 1WML residential element (Hanover Mills)
6. These are the net yields assuming 80% net-to-gross and purchaser costs. C&W has valued Wyckham Point, Dundrum View, Cannon Place and
Hanover Mills on a gross yield basis excl. acquisition and management costs: gross initial yield is 4.7% and gross market reversion is 5.7%
7. Current rental value assumed as ERV as these assets are now being valued on a price per acre basis
8. Excl. all CBD office developments
9. Residential rent on a net basis
10. As per valuer’s ERV @ Sep-18. 1SJRQ ERV based on office rents of €57.50psf which is lower than the rent achieved
11. Net ERV assuming 80% net to gross (as per valuer assumptions)
12. 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.
7The office element of our portfolio, which comprises 87% by value and 89% of our contracted income had the
following statistics at 30 September 2018 (we include also the letting of 1SJRQ to HubSpot, which was signed in
November 2018):
% of
next
% of rent % of rent
rent review MTM 2 at
WAULT to WAULT to upwards cap next
Contracted rent ERV review 1 break/expiry only & collar lease event
Acquired “in-
place” office
portfolio €26.7m (€41psf) €32.0m (€49psf) 2.5yrs 4.5yrs 16% 7% 77%
Completed office
developments 3 €20.5m (€52psf) €20.6m (€52psf) 3.6yrs 10.5yrs4 - 35% 65%
Whole in-place
office portfolio €47.3m (€45psf) €52.6m (€50psf) 3.0yrs 7.1yrs 9% 19% 72%
Pre-let
committed
schemes5 €6.8m (€60psf) €6.7m (€58psf) 5.0yrs 12.0yrs - - 100%
Whole office
portfolio €54.0m (€46psf) €59.3m (€51psf) 3.2yrs 7.7yrs4 8% 17% 75%
1. To earlier of review or expiry
2. Mark-to-market
3. 1 Cumberland Place, SOBO Works, 1&2DC, 1WML
4. Including extension of break option in 1&2DC agreed as part of 1SJRQ letting
5. 1SJRQ
Increasing portfolio income and extending unexpired lease terms remains a key strategic priority. We are
achieving this through the completion and letting of our new office developments and through rent reviews and
lease renewals within the “in-place” portfolio. Since 31 March 2018 we have:
• Added €6.8m to office portfolio income with term certain of 12 years through the letting of 1SJRQ (see
further details in Asset Management section below)
• Added €0.5m through one new lease and one rent review. The rent review delivered an uplift of over
140% on the previous passing rent and was ahead of valuers’ ERV. The acquired “in-place” office portfolio
has an average period to the earlier of rent review or expiry of 2.5 years and reversionary potential of
20% (at valuers’ ERVs) and as at 30 September 2018 nine office rent reviews were outstanding
The “in-place” office portfolio vacancy rate was 3% at 30 September 2018 (31 March 2018: 3%).
8Portfolio performance
In the six months to 30 September 2018 the portfolio value increased €21.2m or 3.9% on a like-for-like basis (i.e.
excluding acquisitions, disposals and capital expenditure).
Value as at Value as at
Mar-18 Capex Acquisitions 1 Disposals 2 Revaluation Sep-18 L-f-L change
1. Dublin CBD offices
Traditional core €436m - - - €11m €447m €11m 2.5%
IFSC €261m €2m - (€62m) €3m €204m €3m 1.3%
South Docks €322m €1m €3m - €8m €334m3 €8m 2.5%
Total Dublin CBD
offices €1,019m €3m €3m (€62m) €22m €985m €22m 2.3%
2. Dublin CBD office
development €134m €20m - - €18m €173m €18m 11.9%
3. Dublin residential €138m - €1m - €9m €148m €9m 6.6%
4. Industrial/other €18m - €7m - (€1m) €24m - 2.2%
Total €1,309m €23m €11m (€62m) €48m €1,330m €49m 3.8%
1. Including acquisition costs
2. As at March 2018 valuation (smoothed). Sale price was €65.3m and net proceeds after sales costs were €65.0m
3. Excludes the value of space occupied by Hibernia in South Dock House
The key individual valuation movements in the period were:
• 1SJRQ, South Docks: €11.7m / 11% uplift driven by compression of the equivalent yield from 4.75% to
4.5%, an increase in the headline market rent from €56 per sq. ft. to €57.50 per sq. ft. and the project
getting closer to development completion
• 2WML, South Docks: €6.4m / 17% uplift driven by a change from valuing the asset on a development basis
to investment basis. This led to the release of developer’s profit, finance costs and double acquisition
costs, though the uplift was moderated by a move in the equivalent yield from 5.0% to 5.25% to reflect
the change in valuation methodology. The headline market rent also increased from €53 per sq. ft. to
€54 per sq. ft.
• Block 3, Wyckham Point, D14: €6.0m / 7% uplift driven by yield compression from 4.0% NIY to 3.8% NIY.
The valuer’s assessment of market rent also increased by 5%
• 1WML, South Docks: €5.0m / 4% uplift driven by the equivalent yield on the office building moving from
4.6% to 4.4%
• 1 Cumberland Place, D2: €4.4m / 3% uplift due to the movement of the equivalent yield on the building
from 4.75% to 4.6%
Developments and refurbishments
Schemes completed
None in the period.
Committed development schemes
At 30 September 2018, we had three committed schemes in progress which will deliver c. 222,000 sq. ft. of new
and refurbished Grade A office space: over 50% of this is now let.
• 172,000 sq. ft. of offices completing shortly: comprising 1 Sir John Rogerson’s Quay (“1SJRQ”) and 2
Windmill Lane (“2WML”). Both projects are in Hibernia’s first cluster of office buildings, the Windmill
9Quarter, in the South Docks. With the completion of these two projects by early 2019 the Windmill
Quarter will be finished and will comprise c. 400,000 sq. ft. of office space along with further residential,
food & beverage and gym areas. As announced today (13 November 2018), HubSpot has agreed to let all
112,000 sq. ft. of office space in 1SJRQ on a long lease commencing in June 2019 (see further details in
Asset Management Section)
• 50,000 sq. ft. of offices completing in 2020: Phase II Cumberland Place, D2, is now under way and is
scheduled to complete in the first six months of 2020. The new building will be in front of the existing
building at 1 Cumberland Place and has the potential either to link into the existing reception or to be
separately accessed, with additional flexibility to interlink certain floors to the existing building if required.
Phase II will bring the total office area on the site to c. 180,000 sq. ft.
At 30 September 2018 Cushman & Wakefield, the Group’s independent valuer, had an average estimated rental
value for the unlet office space (222,000 sq. ft.) in the committed developments (1SJRQ, 2WML and Cumberland
Place Phase 2) of €55.92 per sq. ft. and was assuming an average yield of 4.75% upon completion: based on these
assumptions it expects a further c. €8m of development profit (excluding finance costs) to be realised through
the completion and letting of these schemes. A 25-basis point movement in yields across the properties would
make c. €13m of difference to the development profits, and a €2.50 per sq. ft. change in estimated rental value
(“ERV”) would result in a c. €10m difference. If current market conditions prevail, we would expect these yields
to tighten once the buildings are completed and let.
Please see further details on the committed development schemes below:
Full Expected practical
Total area post purchase Capex/Est. Est. total cost completion (“PC”)
1 1
Sector completion (sq. ft.) price capex (incl. land) ERV Office ERV date
60k office
2WML Office 12k gym €21m €22m €678psf2 €3.5m €54.08psf2 Q4 2018
112k office Q1 2019
7k food & Office space fully
2
1SJRQ Office beverage €18m €58m €639psf €6.7m €57.50psf2 let
Cumberland 50k office
Phase 2 Office 1k retail/café €0m €30m €600psf2 €2.8m €54.61psf2 H1 2020
222k office
Total 20k retail/gym
committed €39m €110m €13.0m
1. Per C&W valuation at 30 September 2018
2. Office demise only
Development pipeline
We have three office schemes in the future pipeline (treating Clanwilliam Court and Marine House as one project)
which, if undertaken, would deliver up to an estimated 543,000 sq. ft. of high quality office space upon
completion: this figure has increased by 8% since 31 March 2018 due to the addition of up to 38k sq. ft. extra
space from provisional grants of planning. Two of these future projects, Clanwilliam Court / Marine House and
Harcourt Square, provide us with opportunities to create clusters of office buildings with shared facilities similar
to the Windmill Quarter referred to above.
In the longer term there is potential for mixed-use development schemes at Gateway/Newlands Cross, where we
now own 143.7 acres, and 129 Slaney Road, where we own 3.8 acres. In both cases re-zoning will be necessary
and so the timing of any future developments is uncertain at present.
10Area post Full
Current area completion purchase
Offices Sector ( sq. ft.) (sq. ft.) price Comments
• Refurbishment/redevelopment opportunity post
2020/2021
• Potential to add significantly to existing NIA across all four
Blocks 1, 2 & 5 blocks and create an office cluster similar to Windmill
Clanwilliam Quarter
Court and • Decision to grant planning to refurbish Marine House,
Marine House Office 139k 200k €80m under appeal
• Lease to OPW until Dec 2022
• Site offers potential to create cluster of office buildings
and shared facilities
Harcourt 117k on • Decision to grant planning for 315k sq. ft. (up from full
Square Office 1.9 acres 315k €72m planning 277k sq. ft.), subject to appeal
• Current planning permission for two extra floors
One Earlsfort • Potential for redevelopment as part of wider Earlsfort
Terrace Office 22k 28k €20m Centre scheme
Total offices 278k 543k €172m
Mixed-use
• Strategic transport location
Gateway & • Potential for future mixed-use redevelopment
Newlands • Decision to grant planning for new access road, subject to
Cross lands 143.7 acres n/a €48m1 appeal
• Strategic transport location
129 Slaney 65k on • Potential for future mixed-use development subject to
Road 3.8 acres n/a €5m rezoning
Total mixed -
use 147.5 acres n/a €53m
1.
Initial consideration including transaction costs
Asset management
In the period we added €6.9m to contracted rents through lettings and €0.4m though rent reviews, a total of
€4.9m net of lease expiries, surrenders, sales and acquisitions, increasing the contracted rent roll by 9% to €60.9m
(note: figures include letting of 1SJRQ to HubSpot, which occurred after period end). Nine office rent reviews are
currently active representing €2.5m of contracted rent with an ERV of €4.5m.
Summary of letting activity since 31 March 2018 (including letting of 1SJRQ)
Offices:
• Two new lettings totalling 113,000 sq. ft. and generating €6.9m per annum of incremental new rent. The
weighted average periods to break and expiry for the new leases were 11.9 years and 19.9 years,
respectively
• One rent review concluded over 12,000 sq. ft. adding a further €0.4m of rent per annum: this rent review
was over 140% ahead of previous contracted rents and ahead of ERV
Residential:
• 293 of the Company’s 328 apartments are located in Dundrum and, in the period, average rents achieved
in new lettings by the Company for two bed apartments in Dundrum were €1,843 per month vs average
two bed passing rents of €1,771 per month
• Letting activity and lease renewals at Dundrum generated incremental gross annual rent of €0.1m in the
period (new leases signed on 31 apartments and leases renewed on 27 apartments)
At 31 March 2018 the vacancy rate in the office portfolio was 3%, based on lettable area.
11Key asset management highlights
1SJRQ, South Docks
As announced separately today (13 November 2018), HubSpot has agreed to let all of the office accommodation
in the building (112,000 sq. ft.) on a 20 year, with 12 years term certain, commencing in June 2019. HubSpot will
pay an initial rent of €6.8m per annum, equating to €59.75psf, after a four-month rent free. As part of the letting,
HubSpot, which also occupies 73,000 sq. ft. in One and Two Dockland Central, has agreed to extend the date of
its break options in these buildings by three and a half years to coincide with those at 1SJRQ. Hibernia is also in
discussions with various food and beverage operators regarding the 7,000 sq. ft. of retail space in 1SJRQ.
2WML, South Docks
After period end Perpetua, a leading gym operator, agreed to let the ground floor, a 12,000 sq. ft. gym, at an
initial rent of €0.1m per annum, rising to €0.2m per annum by year three, on a 10-year lease, with six years term
certain. We believe the gym will prove to be a popular amenity for the Windmill Quarter. Discussions continue
with potential occupiers for the 60,000 sq. ft. of office accommodation in the building which is scheduled to
complete in by the end of 2018.
50 City Quay, South Docks
The 4,500 sq. ft. riverside office building, which occupies a prominent corner adjacent to the Windmill Quarter,
was acquired vacant (see further details above). We are currently considering our options to improve the
building, which is in need of refurbishment.
Cannon Place, D4
The tenants in the 16 units moved out during the year ended March 2018 to enable remedial works to be carried
out. These works are now complete and we are considering disposing of the asset and recycling the capital into
other opportunities.
Central Quay, South Docks
Daqri, which occupies the first floor (11,000 sq. ft.) and is paying rent of €0.6m per annum, has served notice that
it will be exercising its break option in March 2019. The remaining vacant space on the ground floor (5,000 sq.
ft.) and the third floor (12,000 sq. ft.) continues to be marketed.
Marine House, D2
There are two rent reviews active, regarding a total of 4,300 sq. ft. of ground floor space, which is let to WK
Nowlan Property.
The Forum, IFSC
Hibernia continues to consider options for the building, with Depfa Bank (“Depfa”) having served notice to
terminate its leasehold interests in March 2019. Depfa occupies all 47,000 sq. ft. of office accommodation, along
with 50 car parking spaces, and is paying an annual rent of €2.0m. The September 2018 ERV of the offices is in
excess of the passing rent.
Hardwicke & Montague House, D2
There are seven rent reviews outstanding in the buildings, relating to 81,000 sq. ft. of office accommodation, with
passing rents of €2.4m and ERV of €4.3m.
Observatory, South Docks
A 10 year lease has been signed with Goldentree Asset Management for the ground floor office suite of 1,200 sq.
ft. generating rent of €0.1m per annum, equating to €60 per sq. ft.: the lease has a term certain of five years.
Flexible workspace arrangement
The flexible workspace arrangement with Iconic Offices (“Iconic”) in 21,000 sq. ft. of Block 1 Clanwilliam Court
continues to perform ahead of budget, with 97% of the workstations occupied and 84% of the available co-
working memberships rented as at 30 September 2018.
Other completed assets
The remaining completed properties in the portfolio remain close to full occupancy. The average period to rent
review or lease expiry for the acquired “in-place” office portfolio (not including recently completed
developments) is 2.5 years.
12Financial results and position
As at 30 September 2018 31 March 2018 Movement
IFRS NAVPS 167.2 160.6 +4.1%
EPRA NAVPS1 166.3 159.1 +4.5%
Net debt1 €163.9m €202.7m (19.1%)
Group LTV1 12.3% 15.5% (20.6%)
Financial period ended 30 September 2018 30 September 2017 Movement
Profit before tax for the period €64.0m €70.6m (9.5)%
EPRA earnings1 €12.8m €9.0m +42.4%
IFRS EPS 9.2 cent 10.2 cent (9.8)%
Diluted IFRS EPS 9.2 cent 10.2 cent (9.8)%
EPRA EPS 1 1.8 cent 1.3 cent +38.5%
Proposed interim DPS1 1.5 cent 1.1 cent +36.4%
1
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.
The key drivers of EPRA NAV per share, which increased 7.2 cent from 31 March 2018 were:
- 6.9 cent per share from the revaluation of the property portfolio, including 2.7 cent per share in relation
to development properties: the yield compression seen in the market helped the value of the Group’s
more prime office assets and its residential assets
- 1.8 cent per share from EPRA earnings in the period
- 0.4 cent per share from profits on the sale of an investment property
- Payment of the FY18 final dividend, which reduced NAV by 1.9 cent per share
EPRA earnings was €12.8m, up 42.4% compared to the same period in the prior year. The uplift was principally
due to increased rental income as a result of new lettings made at our developments in the prior financial year.
Administrative expenses (excluding performance related payments) were €7.6m (Sep 2017: €6.5m). Performance
related payments were €2.8m (Sept 2017: €2.2m) and related to performance fees accrued, the majority due to
the Group’s outperformance of the IPD Ireland index in the period.
Profit before tax was €64.0m, a reduction of 9.5% over the prior year, mainly due to lower revaluation gains in
the financial period compared to the same period last year. For reference, the six months ended 30 September
2017 saw significant yield compression in the office sector: the increase in stamp duty on Irish commercial
property transactions introduced last year took effect from 11 October 2017 and hence is not seen in the
comparator period’s financial performance. The impact had it been effective at 30 September 2017 would have
been to reduce valuation gains by an estimated €53.7m.
Financing and hedging
The Group has a single revolving credit facility of €400m which matures in November 2020. As at 30 September
2018, net debt was €163.9m, a loan to value ratio (“LTV”) of 12.3%, down from net debt of €202.7m (LTV of
15.5%) at 31 March 2018 due to the disposal of New Century House together with some smaller acquisitions and
capital expenditure on developments. Cash and undrawn facilities as at 30 September 2018 totalled €236.1m or
€150.1m net of committed capital expenditure and the acquisition of further land at Newlands Cross announced
in November 2018. Assuming full investment of the available RCF funds in property, the LTV, based on property
values at 30 September 2018, would be c. 25%. The Group’s through-cycle leverage target remains 20-30% LTV.
The Group’s policy is to fix or hedge the interest rate risk on the majority of its drawn debt. As at 30 September
it had interest rate caps and swaptions with 1% strike rates in place covering the interest rate risk on €244.7m of
the RCF drawings, comprising:
13- €100m cap expiring November 2018 / €100m swaption exercisable in November 2018 and terminating
in November 2020 (this portion of hedging expired in November 2018)
- €100m cap expiring November 2019 / €100m swaption exercisable in November 2019 and terminating
in November 2021
- €44.7m cap (originally put in place for the 1WML secured facility) expiring in January 2019
The Group expects to diversify its sources of debt funding and lengthen the average maturity of its debt in the
near term.
Dividend
The Group’s policy is to distribute 85-90% of recurring rental profits via dividends each year, with the interim
dividend in a year usually representing 30-50% of the total ordinary dividends paid in respect of the prior financial
year. Taking account of this policy, the anticipated growth in rental income in the current year and the dividends
of 3.0 cent per share paid in respect of the prior year, the Board has declared an interim dividend of 1.5 cent per
share (2017: 1.1 cent).
The interim dividend will be paid on 24 January 2019 to shareholders on the register as at 4 January 2019. All of
the dividend will be a Property Income Distribution (“PID”) in respect of the Group’s property rental business as
defined under the Irish REIT legislation.
Hibernia’s Dividend Reinvestment Plan (“DRIP”) is available to shareholders and allows them to instruct Link, the
Company’s registrar, to reinvest the dividends paid by Hibernia into the purchase of shares in the Company. The
terms and conditions of the DRIP and information on how to apply are available on the Group’s website.
Arrangements regarding the expiry of the Investment Management Agreement
The five-year term of the Investment Management Agreement (“IMA”) entered between Hibernia and WK
Nowlan REIT Management Ltd (its former Investment Manager) expires on 26 November 2018. As part of the
arrangements for the internalisation of the Investment Manager in 2015 (the “Internalisation”) it was agreed that
any payments due under the IMA each financial year would be paid, mainly in shares, in lieu of a separate incentive
scheme until 26 November 2018. From this date onwards the Company’s new Remuneration Policy, which was
approved by shareholders at the Company’s AGM in July 2018, will take effect.
The Board has considered how best to calculate any performance fees and other related payments for the final
period of the IMA from 1 April 2018 to 26 November 2018. Since the IPD Ireland Index, which is used in the
calculation of any relative performance fees, reports on a quarterly basis the Board has determined that it is most
appropriate to measure the Company’s performance to 31 December 2018, being the nearest quarter end, and
to pro-rate any performance fees due for the fact that the final IMA period expires on 26 November 2018. Any
performance fees due will be paid primarily in shares (subject to the standard lock-up provisions) which will issue
only once the audit of the accounts for the year ended 31 March 2019 is completed.
Management changes
With effect from 1 January 2019 Justin Dowling, currently Head of Asset Management, will become Director of
Property with responsibility for managing all Hibernia’s property assets and leading the Asset Management and
Building Management teams. Frank O’Neill, currently Chief Operations Officer, will retain responsibility for
business support areas, including IT, HR and general business operations, working on a part-time basis. He will
continue as a member of Hibernia’s management committees. His new title will be Director of Operations.
As part of the Internalisation Frank Kenny and William Nowlan entered into consultancy agreements for the period
up to 26 November 2018. Frank Kenny, who is also a non-executive Director of Hibernia, will continue to provide
advice on the Company’s development projects and his agreement will be extended until 31 March 2019.
14Selected portfolio information
1. Summary EPRA measures
Six months ended Six months ended
EPRA performance measure
Unit 30 September 2018 30 September 2017
EPRA earnings €’000 12,849 9,024
EPRA earnings per share Cent 1.8 1.3
Diluted EPRA EPS Cent 1.8 1.3
EPRA cost ratio - including vacancy costs % 42.5% 44.1%
EPRA cost ratio - excluding vacancy costs % 41.1% 41.8%
As at 30 September 2018 As at 31 March 2018
EPRA performance measure
Unit
EPRA Net Initial Yield (“NIY”) % 4.1% 3.8%
EPRA ‘topped-up’ NIY % 4.2% 4.3%
EPRA Net Asset Value (‘EPRA NAV’) €’000 1,166,542 1,112,075
EPRA NAV per Share Cent 166.3 159.1
EPRA triple net assets (‘EPRA NNNAV’) €’000 1,166,266 1,111,730
EPRA NNNAV per share Cent 166.3 159.1
Like-for-like rental growth % 7.6% 6.5%1
EPRA vacancy rate % 3.0% 2.0%
112 months ended 31 March 2018
2. Top 10 “in-place” office occupiers by contracted rent and % of contracted “in-place” office rent roll
Top 10 tenants € ’m % Sector
1 The Commissioners of Public Works 6.0 12.7% Government
2 Twitter International Company 5.1 10.8% TMT
3 Hubspot Ireland Limited 1 3.8 8.0% TMT
4 TMT Tenant 2.8 5.9% TMT
5 Informatica Ireland EMEA 2.1 4.4% TMT
6 Depfa Bank plc 2.0 4.2% Banking and capital markets
7 Electricity Supply Board 1.9 4.0% Government
8 Travelport Digital Limited 1.8 3.8% TMT
9 IWG 1.8 3.8% Serviced offices
10 BNY Mellon 1.6 3.4% Banking and capital markets
Top 10 total 28.9 61.0
Rest of portfolio 18.4 39.0
Total contracted “in-place” office rent 47.3 100.0
1
Excludes 1SJRQ lease agreed in November 2018
153. “In-place” office contracted rent by tenant business sector
Sector € 'm %
TMT1 21.1 44.6
Government 10.3 21.8
Banking & capital markets 7.1 15.0
Professional services 4.3 9.1
Serviced offices 2.3 4.9
Insurance & reinsurance 1.2 2.5
Other 1.0 2.1
Total 47.3 100.0
1Excludes 1SJRQ lease agreed in November 2018
4. “In-place” office contracted rent and WAULT progression
Sep-17 Movement to Mar-18 Movement to Sep-18
Mar-18 Sep-18
All office contracted rent1,2,4 €43.5m +14% €49.6m +9% €54.0m
In-place office contracted rent1,4 €41.3m +23% €49.6m -5% €47.3m
In-place office WAULT3 6.9yrs +6% 7.3yrs -3% 7.1yrs5
In-place office vacancy4 10% -7% 3% - 3%
1. Excl. arrangement with iconic Offices at Block 1 Clanwilliam
2. Including pre-let of 1SJRQ
3. To earlier of break or expiry
4. By net lettable office areas. Office area only i.e. excl. retail, basement, gym, townhall etc.)
5. Increases to 7.7 years with inclusion of 1SJRQ pre-let
16Principal Risks and Uncertainties
There are a number of risks and uncertainties which could have a significant impact on the Group’s performance
and could cause actual results to differ materially from expected results. The Directors consider that the principal
risks and uncertainties to the Group, which are set out on pages 40 to 47 of the 2018 Annual Report, are
substantially unchanged for the remaining six months of the financial year. These risks and uncertainties are
summarised, together with a short update where relevant, below.
Strategic risks: inappropriate business strategy
Office leasing continues to be strong with almost 40% of take-up coming from the TMT sector in the first nine
months of 2018 and a number of very large lettings in the market. The Group prepares a rolling three-year
forecast which is assessed at each quarterly Board meeting and used in considering strategic direction. This risk
remains the same as at the financial year ended 31 March 2018.
Market risks: weakening economy/under-performance of Dublin property market
Strong growth in the Irish economy is forecast into 2019. The Department of Finance expects Irish GDP growth of
7.5% in 2018 and 4.5% in 2019. However risks are increasing: domestically the possibility of a general election in
the next six months has risen, and with the employment market approaching full employment, inflation may
increase. Internationally the risks of a disorderly Brexit, global trade wars and a slowdown in US economic growth
have increased, all of which would be negative for Ireland. The Group has continued to work to extend its WAULT
which now stands at 7.7 years for the whole office portfolio (including the HubSpot letting), up from 7.3 years at
31 March 2018 helping to reduce vacancy risks in a market downturn.
Development risks: poor execution of development projects
Construction cost inflation is estimated to be high single digit percent per annum and this is likely to impact on
the profitability of future developments. Therefore the Group views this risk as increased for the remaining six
months of the financial year 2019. The Group uses fixed rate contracts to remove cost inflation risk during the
construction phase. The Group has a highly experienced internal development team and partners with
contractors with proven track records which also helps to mitigate construction risks, including the risks of
breaching building standards. As at 30 September 2018 the Group had three committed schemes, totalling 222k
sq. ft. of offices: two of these will complete in the next few weeks while the third has commenced and is targeted
for completion in H1 2020. More than 50% of this space is now let following the HubSpot lease in 1SJRQ.
Investment risks: poor/mis-timed investment or sale or asset allocation
The Group’s portfolio was worth €1.3billion at 30 September 2018 and comprised 33 properties, the largest being
11% of the portfolio by value (31 March 2018: 11%). The Group has been a net seller of assets since 31 March
2018, disposing of New Century House for €65m and recycling €10m into four new acquisitions in the six months
ending 30 September 2018, where it believes it can generate better returns. This risk therefore remains stable.
Asset management risks: poor asset management leading to underperformance
The Group continues to work to implement improvements in asset and building management and this risk remains
stable. Sustainability targets include resource management and tenant consultation to improve general
satisfaction and identify priorities for future initiatives. Compliance with sustainability and environmental
standards has been an increasing focus. The Group completed its first GRESB assessment during the period and
has identified areas to improve performance in future.
Finance risks: inappropriate capital structure or lack of available funding
At 30 September 2018 the Group’s indebtedness was low with a LTV ratio of 12% (31 March 2018: 16%).
Committed capital expenditure in the next 18 months and post balance sheet acquisitions are expected to
increase the LTV ratio to c.18%. At 30 September 2018 the Group had cash and undrawn facilities totalling €236m,
or €150m net of committed capital expenditure and the acquisition of further land at Gateway announced in
November 2018, (31 March 2018: €197m or €120m, respectively), and just over two years until the maturity of
its debt facilities. The Group continues to monitor its capital requirements closely and expects to extend its
average debt maturity and diversify its sources of funding in the near term. Consequently, it does not foresee this
17risk increasing for the remaining six months of the financial year 2019. No covenant breaches occurred in the
period.
People risks: Loss of key staff and/or motivation
The Group’s current performance remuneration arrangements end on 26 November 2018. A new Remuneration
Policy was approved by shareholders at the AGM in July 2018 which will replace the existing arrangements when
they expire. This risk will remain stable for the remining six months of the financial year.
Regulatory & tax risks: adverse changes or failure to comply with legislation including the REIT regime
Regulatory, legislative and tax risks remain stable and we review them regularly with our professional advisers.
Business interruption risks: adverse external event
Cyber security continues to be a focus. The Group has continued to improve its IT security measures during 2018
by reviewing controls and working with our IT consultants. The implementation of GDPR was completed in this
period. Business continuity plans are reviewed periodically. Other business interruption risks remain stable.
18Directors’ Responsibilities Statement
Each of the Directors, whose names appear on page 79 of this report confirm to the best of their knowledge that
the condensed consolidated interim financial statements in the Half Yearly Financial Report have been prepared
in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the European
Union (“EU”) and the interim management report7 herein contains a fair review of the information required by
Disclosure and Transparency Rules of the Central Bank of Ireland, namely:
- Regulation 8(2) of the Transparency Directive (Directive 2004/109/EC) Regulations 2007, being an
indication of important events that have occurred during the period from 1 April 2018 to 30 September
2018 and their impact on the half yearly financial report, and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
- Regulation 8(3) of the Transparency Directive (Directive 2004/109/EC) Regulations 2007, being related
party transactions that have taken place during the period from 1 April 2018 to 30 September 2018 and
that have materially affected the financial position or performance during the period.
Signed on behalf of the Board
Kevin Nowlan Thomas Edwards-Moss
Chief Executive Officer Chief Financial Officer
12 November 2018
7 Comprising the Business review and Principal risks and uncertainties
19INDEPENDENT REVIEW REPORT TO HIBERNIA REIT PLC
We have been engaged by the Hibernia REIT plc (“the Company”) to review the interim financial information
included in the Half Yearly Financial Report for the six months ended 30 September 2018 which comprise the
condensed consolidated statement of financial position as at 30 September 2018 and the related condensed
consolidated income statement, condensed consolidated statement of comprehensive income, condensed
consolidated statement of changes in equity, condensed consolidated statement of cash flows, and the related
notes 1 to 29 for the six-month period then ended (“interim financial information”). We have read the other
information contained in the Half Yearly Financial Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the interim financial information.
This report is made solely to the company in accordance with International Standard on Review Engagements
2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” (“ISRE 2410”)
issued by the International Auditing and Assurance Standards Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company, for our review work, for this review report, or for the conclusions we have formed.
Directors’ responsibilities
The Half Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the Half Yearly Financial Report which includes the interim financial information, in
accordance with the International Accounting Standard 34, ‘‘Interim Financial Reporting,’’ as adopted by the
European Union and the Transparency (Directive 2004/109/EC) Regulations 2007, and the Transparency Rules of
the Central Bank of Ireland.
As disclosed in note 2, the annual financial statements of the company are prepared in accordance with IFRSs as
adopted by the European Union. The interim financial information included in this Half Year Financial Report has
been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” as adopted
by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the interim financial information in the Half-Yearly
Financial Report based on our review.
Scope of our review
We conducted our review in accordance with ISRE 2410. A review of interim financial information consists of
making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical
and other review procedures. A review is substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (Ireland) and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim financial
information in the Half-Yearly Financial Report for the six months ended 30 September 2018 is not prepared, in
all material respects, in accordance with the International Accounting Standard 34, ‘‘Interim Financial Reporting,’’
as adopted by the European Union and the Transparency (Directive 2004/109/EC) Regulations 2007, and the
Transparency Rules of the Central Bank of Ireland.
Christian MacManus
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
Deloitte & Touche House, Earlsfort Terrace, Dublin 2
12 November 2018
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