Irish Residential Properties REIT plc - Interim Results - 30 June 2020 7 August 2020
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Irish Residential Properties REIT plc Interim Results - 30 June 2020 7 August 2020
D I S C L AI M E R
Cautionary Statements
This presentation has been prepared by Irish Residential Properties REIT PLC (the “Company” or “I-RES”) for information purposes only.
This presentation has been prepared in good faith but the information contained in it has not been independently verified and does not purport to be comprehensive. The Company is not
undertaking any obligation to provide any additional information or to update this presentation or to correct any inaccuracies that become apparent. This presentation is neither a prospectus nor an
offer nor an invitation to apply for securities. The information contained in this presentation is subject to material updating, completion, revision, amendment and verification. Any prospective
investor must make its own investigation and assessments and consult with its own adviser concerning any evaluation of the Company and its prospects.
No representation or warranty, express or implied, is given by or on behalf of the Company, its group companies, IRES Fund Management Limited (“IRES Fund Management”) or any of their
respective shareholders, directors, officers, employees, advisers, representatives, agents or any other persons as to the accuracy, completeness, fairness or sufficiency of the information,
projections, forecasts or opinions contained in this presentation. 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 presentation and neither of the Company or IRES Fund Management, nor any of their employees, officers, directors, advisers, representatives, agents or affiliates, shall have any liability
whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising
in connection with this presentation. Certain financial and statistical information contained in this presentation is subject to rounding adjustments. Accordingly, any discrepancies between the totals
and the sums of the amounts listed are due to rounding.
This presentation contains 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 the negatives thereof) or other variations thereon or comparable terminology. Such forward-looking statements are based on the beliefs of its management as well as
assumptions made and information currently available to the Company. Forward-looking statements speak only as of the date of this presentation and the Company and IRES Fund Management
expressly disclaim any obligation or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation, including any changes in its expectations or any
changes in events, conditions or circumstances on which these forward-looking statements are based including in respect of the Covid-19 pandemic, the uncertainty of its duration and impact, and
any government regulations or legislation related to it. . 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.
To the extent indicated, certain industry, market and competitive position data contained in this presentation come from third party sources. Third party industry publications, studies and surveys
generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. While the
Company believes that each of these publications, studies and surveys has been prepared by a reputable source, neither the Company nor IRES Fund Management have independently verified
the data contained therein. In addition, certain of the industry, market and competitive position data contained in this presentation may come from the Company’s own internal research and
estimates based on the knowledge and experience of the Company and IRES Fund Management in the Irish market. While the Company believes that such research and estimates are reasonable
and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change. Accordingly,
undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation.
THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES NOR SHALL IT OR ANY
PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT TO PURCHASE SHARES
1
H1 2020 Highlights
Financial Results
Modern Assets Portfolio
Continuing Growth Strategy
ESG
Outlook
Appendix
2
IRISH RESIDENTIAL PROPERTIES REIT plc
H1 2020 Highlights
6 3
H1 2020 Highlights
Resilient Operating Performance during Covid-19
June 2020 June 2019
Revenue from Investment Properties (€m) 37.4 27.8
Net Rental Income (€m) 29.6 22.7
Net Rental Income Margin (%) 79.2 81.6
Total Number of Residential Units 3,739 2,771
Overall Portfolio Occupancy Rate 97.9% 98.3%
Overall Portfolio Average MonthlyRent €1,599 €1,598
Net Rental Income Number of Units Occupancy Net Rental Margin
€29.6m +35% 3,739
+30% 80.3% 81.6% 79.2%
98.7% 98.3% 97.9%
2,771
2,608
€22.7m
€19.3m
H1 2018 H1 2019 H1 2020 H1 2018 H1 2019 H1 2020 H1 2018 H1 2019 H1 2020 H1 2018 H1 2019 H1 2020
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc 4 7
H1 2020 Highlights
A Robust and Flexible Balance sheet
June 2020 Dec 2019
Total Property Value €1,362.6m €1,359.2m
Net Asset Value €784.5m €810.2m
EPRA NRV €842.6m €867.7m
Basic NAV per share (cents per share) 150.4 155.3
Group Total Gearing 42.9% 40.8%
Gross Yield at Fair Value 5.7% 5.6%
Total Property Value (€m) Net Asset Value (€m) Gross Yield at Fair Value Gearing (LTV)
810 6.0% 42.9%
785 40.8%
1,359 1,363 5.6% 5.7% 38.6%
706
990
H1 2019 FY 2019 H1 2020 H1 2019 FY 2019 H1 2020
H1 2019 FY 2019 H1 2020 H1 2019 FY 2019 H1 2020
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
5 7
Execution on Growth Strategy
Hansfield Wood II Future Pipeline
Significant Unit Growth over 12 Month Period Pre-purchase Transactions
Project Merrion 69
Waterside
Under construction by IRES
Bakers Yard 61
Priorsgate 5
Total 66
Tallaght Cross West Planning Permission Granted
Priorsgate (Bruce House) 31
Beacon Sq South (B4) 84
Rockbrook 428
Total 543
IRES Proforma
Balbriggan Portfolio
4,512
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
6 7
IRES managing through Covid-19 uncertainty
Robust Balance Diversified sources of funding
Sheet Long-term laddered debt maturity ranging from 2024 to 2032, with average interest rate below 2.0%
with Strong LTV of 42.9% below the 50% maximum allowed under the Irish REIT legislation
Liquidity
Collections rates have remained resilient post Covid-19 at 98.4% for the portfolio
‘Working from home’ in place for all staff other than frontline site staff
R&M limited to essential works during the early stage of the pandemic, now returned to a full service
Operations Maintained high customer service and communication levels
Moratorium on rent increases and evictions due to Covid-19
Proactively working with tenants to provide solutions for those in financial distress
Developments Expect some delays to completion of developments due to the closure of sites for 7 weeks
Work has recommenced on all sites
Providing practical support for medical frontline staff
Social
Responsibility Provided units in certain properties close to hospitals for frontline staff, namely, Tallaght Cross West,
Waterside and Elm park
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
7
IRISH RESIDENTIAL PROPERTIES REIT plc
Financial Results
6 8
Financial Results H1 2020
Operating Performance Commentary
• c. 30.2% increase in Net Rental Income
Period ended 30 June 2020 2020 2019
Revenue from Investment Properties (€m) 37.4 27.8 • EPRA Earnings adjusted for non-recurring expenses
increased 19% to €18.2m (June 2019: €15.3m)
Net Rental Income (€m) 29.6 22.7
Net Rental Income Margin (%) 79.2 81.6 • Non-recurring items include costs for transactions that
could not be closed due to Covid-19 pandemic and had to
EPRA Earnings (€m) 15.9 15.3
be expensed and other third-party advisory services.
Non-recurring items (€m) 2.3 -
EPRA Earnings adjusted for non-recurring items • Proposed interim dividend of 2.75 cents per share for the
18.2 15.3
(€m) six months ended 30 June 2020, implying growth of 1.8%
Per share Data
Period ended 30 June 2020 2020 2019
EPRA EPS (cents) 3.1 3.5
Dividend per share 2.75 2.7
7
Grande Central, Sandyford, Dublin 13
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
9Financial Results 2020
Strong Balance Sheet
June 2020 Dec 2019
Number of Units 3,739 3,666
Total Property Value €1,362.6m €1,359.2m Commentary
EPRA Net Reinstated Value (cents per share) 160.8 165.4 • Basic NAV per share decreased by 3.2%,as a result of
property valuation decreases and dividends paid in March
Basic NAV per share (cents per share) 150.4 155.3 2020, offset by rental profit in the period
Group Total Gearing 42.9% 40.8%
• The portfolio had a 1.95% fair value decrease (€ 27.2m
revaluation loss) at 30 June 2020 arising from an
independent valuation with adjustment principally due to
lower forecasted rental income in short term due to
Covid-19
Funding Strategy RCF Notes
• LTV increased to 42.9% driven by additional borrowing to
Facility €600m €200m note1, 2 acquire Waterside, below the 50% maximum allowed under
the Irish REIT legislation
Syndicate of
Diversify sources Syndicate of 5 banks international institutional • The Company has € 14.1m of cash and €212m of
investors committed undrawn debt under its RCF providing a strong
5-year term, option to Average maturity of 9.7 liquidity position
Extended maturity
extend to 7 years years
• Successful completion of a private placement of notes of
Maturity dates 2024 (option to 2026) 2027 - 2032 circa €200 million euro equivalent in March 2020
Maintain a low 1.75%, plus the one or
1.92%
interest cost one month EURIBOR3
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
1 Euro
The Coast, Baldoyle, Dublin 13 10
equivalent 2€204m of the RCF is hedged at an effective swap interest rate of 1.66% 3 The Notes have a weighted average fixed interest rate of 1.92% inclusive of the swap.IRISH RESIDENTIAL PROPERTIES REIT plc
Modern Assets Portfolio
6 11Modern asset base, with strong occupancy levels, supported by
competitive rental levels demonstrates the resilience of the portfolio
Distribution by Split of Distribution by Average Properties by Distribution by Age
Bedrooms(1) Monthly Rent(1) Location(1) (Years) (1)
1% 1% 1% 5%
1% 6% 2% 8%
12% 1%
3%
14% 23% 22%
22% 29%
5%
36%
40% 40%
56% 25% 12%
39%
11%
64%
62%
€1,000 to €1,500 €1,500 to €2,000 South Dublin City Centre West City €2,500 North Dublin West Dublin Cork 11 to 13 14 to 16 17+
✓ ✓ ✓ Young, modern, portfolio,
Majority of portfolio Focus on mid-tier affordable Existing Portfolio entirely average age of 11 years
formed of spacious 2-beds market, which is the most located in locations with
which support home defensive segment amenities and good Favourable for managing
transportation links ongoing maintenance and
working
capex requirements
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
1 As at 30 June 2020
12Large Asset Base Primarily Located Across Dublin
Key Highlights Portfolio Overview (including all committed forward purchases)
Units 36 37 39
South Dublin
01 Beacon South Quarter 225 38
02 Grande Central 65
03 Rockbrook Grande Central 81 30 31 33
Portfolio to reach 3,964(1) units 04 Rockbrook South Central 189
34
32
by 2022 based on committed 05
06
Bessboro
The Forum
40
8
35
forward purchases 07 Elmpark Green 201
28 26
08 The Maple 68
09 Time Place 67 27
10 Beechwood Court 101
11 Belville Court 29
12 Merrion(1) 69 15 20
City Centre 17
29
13 Kings Court 83 21 18
14 The Marker Residence 85 25
42 13 16
15 Bakers Yard 147 19 14
16 City Square 24
43 high quality properties in 17 Xavier Court 41
40
total – 42 of which are spread 18 Spencer House 12
05
across Dublin 19
20
Coopers Court
Richmond Gardens
14
98
41
07
21 East Arran Street 12 12
West Dublin
22 Priorsgate 103
23 The Laurels 19
23
24 Tallaght Cross West 460
25 Coldcut Park 91 22 24 10
08 02
26 Hansfield Wood(1) 194 06 09
03
Portfolio in locations with 27
28
Belleville & The Mills
The Oaks
21
14
01 04 11
amenities and good 29 St Edmunds 18
transportation links. Average North Dublin
commute time to the city 30 Charlestown 235
31 Hampton Wood 128 West City Units
centre of under 40 minutes 32 The Coast 52 40 Camac Crescent 90
Dublin
H1 2020 3739
33 Carrington Park 142 41 Landsdowne Gate 224
34 Heywood Court 39 42 Tyrone Court 95 Bakers Yard 61
Cork
35 Northern Cross 128 Hansfield Wood 95
36 Russell Court 29
Cork2 Units
37 Taylor Hill 78 43 Harty's Quay 50
Merrion 69
38 Semple Woods 40 Owned & Committed 3964
39 Waterside(1) 55
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
1 Portfolio expected as of June 2020, including units from Merrion, Hansfield Wood and Bakers yard; 2 Not shown on map
13IRISH RESIDENTIAL PROPERTIES REIT plc
Continuing Growth Strategy
6 14Demand drivers are strong against increasing supply
constraints
Population growth forecast3 Largest Proportion of 25 - 44 year olds in the EU
Significant supply demand
imbalances persists,
exacerbated by Covid-19
Strong population growth driven
by the highest birth rate in
Europe and inward migration
Young, educated population
with 30% aged between 25-44
years
Estimated demand c.2x supply levels1 Available rental stock in Dublin 2
Due to Covid-19, the Central
Bank expects house
completions to decline to 16k in
2020 from an original estimate
of 26k and below estimated
demand of 35k
Limited available rental stock in
Dublin. Vacancy remains low
despite increased stock coming
to market 2020 Annual General Meeting Irish Residential Properties REIT plc
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
1 CSO, ESRI; 2 Daft.ie; 3 UN Population Growth Forecast; 4 CSO
15I•RES REIT Growth Strategy continues to provide flexibility
Multi-Channel Growth Strategy to Deliver Sustainable Long-Term Growth
1 2 3
Acquisition of Development Development
Completed Assets Partnerships of Existing I•RES Properties
• Continued evaluation of new • Forward purchase agreements • Opportunity to add approx.
acquisition opportunities in with local builders and 609 apartments at currently
attractive urban locations developers for new supply of owned I•RES properties
multi-family and single-family
• Following criteria considered: units • Partially completed foundation
infrastructure (e.g. parking)
▪ Good transportation links, already in place at Rockbrook
community infrastructure – site
in particular, schools
▪ Local employment
▪ Family-friendly
neighbourhoods
Disciplined capital allocation policy to generate value and growing dividends for I•RES shareholders
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
16IRISH RESIDENTIAL PROPERTIES REIT plc
ESG
17ESG is Central to IRES’ Strategy
Key Highlights H1 2020 ESG Framework Overview
We initiated our inaugural Global
Real Estate Sustainability Benchmark
(GRESB) submission process, the
results of which will underpin the
development of our ESG strategy
going forward
We provided residential homes at
Waterside, Tallaght Cross West and IRES Built Environment IRES Communities Governance
Elm Park for the temporary use of
healthcare workers at nearby • IRES meets Irish energy codes • Committed to support • Committed to identify and
hospitals including car parking • Pursues further opportunities to sustainable community optimise opportunities for
reduce carbon footprint development continued improvement in ESG
We switched to 100% renewable • Improve resident experience performance
1. Energy Reduction
electricity for all I-RES owned • Supporting the wellbeing of all Highly experienced Board
Building Energy Rating
common areas, resulting in an employees, by promoting online ESG Steering Committee led
Certificates (54% BER: A-B)
estimated annual savings of over resources to facilitate their by CEO
€35,200 and 218,712 kg in carbon Irish Green Building Council remote working.
Member Ongoing review of policies
emissions, which is the equivalent to • Engaged in various initiatives to and training
the annual energy use of 25 average In 2019: 6757kg of CO2 saved support charities, including
homes. 2. Waste Diversion raising funds in support of the
100% diverted from landfill Dublin Neurological Institute.
Transitioning to 100% renewable Recycling of glass bottles on Dragons at the Docks boat
energy is anticipated to save close to all sites race, charity fundraising event
21% in total yearly electricity costs. by employees for Homeless
Increased segregation of non-
domestic waste and other charities needing
We have in place ‘work from home’ support at this time
arrangements for the majority of 3. Water Conservation
Sponsor to local sports clubs
employees and the leasing and Water conserving taps and
fixtures Charity fundraising events by
maintenance staff
employees
18
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plcIRISH RESIDENTIAL PROPERTIES REIT plc
Outlook
19I•RES REIT - Key Investment Attractions
Why the Irish Multifamily Sector
Economy underpinned by
Strong FDI Flow, Favourable Scarcity of professionally Societal shifts towards long Dublin offers higher yields
Population Demographics Structural Supply Demand managed, high quality rental on multifamily assets than
term renting
and Strong Government Imbalance of Housing homes other European markets
Stimulus for Covid-19
Why IRES REIT
Attractive Market Backdrop Modern Asset Base with Robust Balance Sheet Established Operating Effective Capital
& Growth Opportunities strong growth potential with Strong Liquidity Platform Allocation
• Ireland - c. 20% projected • Portfolio of 3,7391 high- • Average interest rate • Leveraging knowledge, • Strategic deployment of
population growth by 2040 quality, modern assets below 2.0% expertise and technology capital since IPO to grow
• Continued imbalance • Located in desirable areas of CAPREIT portfolio
in Dublin • Long term laddered
between demand and • Established platform with • Generated stable, growing
maturity of debt ranging
supply • Initiated inaugural GRESB 63 personnel in Dublin dividends and NAV
from 2024 to 2032
• Strong presence of submission appreciation
• Occupancy of 97.9% at
international IT and • Diversified sources of
• Average asset age of 30 June 2020 • Acquisition and
Pharma companies as funding
c.11yrs1 development plans to
well as Food/Agri and • 79.2% Net Rental
strategically grow portfolio
Business Services • Gross yields of 5.7%1 Income margin at H1
further
2020
• Attractive place to live
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
1 As at 30 June 2020
20A Place to Call Home
2018 Annual Shareholders’ Meeting Irish Residential Properties REIT plc
17
21IRISH RESIDENTIAL PROPERTIES REIT plc
Appendix
6 22Large apartment size suitable for working from home
Rent Commercial
Number of Number of Average Rent Occupancy
Region (€/ Space Owned
Buildings Units (1) per Month (1) (2) rate % (1) (2)
sqm/month) (sq. m.) (1)
South Dublin 11 1,074 €1,761 €22.6 98.0% 6,854
City Centre 9 455 €1,565 €21.2 91.0% 2,734
West City 3 409 €1,626 €21.4 99.5% —
West Dublin 8 825 €1,489 €19.9 99.9% 17,759
North Dublin 10 926 €1,528 €18.3 98.7% —
Cork 1 50 €1,268 €15.9 98.0% —
Total 42 3,739 €1,599 €20.6 97.9% 27,347
Units Size Average 78 sqm
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
1 As at 30 June 2020 2 Based on residential units. 23Significant government stimulus for economic and social
challenges presented by Covid
• Formation of a new coalition government on 27 June, including Fianna Fail, Fine Gael and the Green Party
• Housing is a central tenet of the government, over the next 5 years the government plans to increase the social housing stock 50,000 units
• Government has announced several stimulus measures to support business and individuals
• Includes a €2bn Credit Guarantee Scheme, €2.6bn to extend tapered household income supports, €1bn of tax
€7.4bn Stimulus cuts, including a six-month cut in VAT from 23% to 21% and €1bn business supports
Package announced in
• Overall, the stimulus in 2020 is worth 1-1.25% of GDP
July
• Ireland has one of the highest stimulus per capita in Europe
• The Pandemic Unemployment Payment (PUP) was initially announced with a timeframe of 12 weeks
Significant income
supports in place • In July, the government extended the PUP until July 2021 with some modifications to the rate bands
• PUP claimants have declined from a peak of >600k in April to 274K in August
• The Residential Tenancies and Valuation Act 2020 in place since 1 August
• The Act provides protections to tenants in receipt of Covid-19 payments and unable to pay rent, including a
Increased Tenant longer notice period for termination of tenancies based on arrears and rent increase moratorium until 10
Protections January 2021
• Current rent regulation provides for rent increases of up to 4% per year in rent pressure zones. Remains in
place until 31 December 2021
2020 H1 Interim Results – Conference Call Irish Residential Properties REIT plc
2425
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