Net Asset Value ("NAV") is a key performance measure for real estate companies. EPRA has introduced a number
of measures to enhance investors' understanding. EPRA has defined three measures in the 2019 Guidelines as
below.
These measures replaced EPRA NAV and EPRA NNNAV as previously reported. The EPRA NAV and EPRA NNNAV are
presented for comparison purposes.
EPRA Net Reinstatement Value ("NRV") highlights the value of net assets on a long-term basis. This assumes
that entities never sell assets and aims to represent the value required to rebuild the entity.
EPRA Net Tangible Assets ("NTA") assumes that entities buy and sell assets, thereby crystallising certain
levels of unavoidable deferred tax.
EPRA Net Disposal Value ("NDV") represents the shareholders' value under a disposal scenario, where deferred
tax, financial instruments and certain other adjustments are calculated to the full extent of their
liability, net of any resulting tax.
Six months ended 30 September 2020
EPRA NRV EPRA NTA1 EPRA NDV2,5
&euro'000 &euro'000 &euro'000
IFRS NAV 1,167,061 1,167,061 1,167,061
Revaluation of - - -
other non-current
investments
Diluted NAV at 1,167,061 1,167,061 1,167,061
fair value3
Exclude:
Deferred tax in 187 - -
relation to
unrealised gains
on investment
property
Fair value of 187 187 -
financial
instruments
Include:
Fair value of - - (4,500)
fixed interest
rate debt
Unamortised - - (2,366)
arrangement fees
Real estate 129,324 - -
transfer tax4
NAV performance 1,296,759 1,167,248 1,160,195
measure
Diluted number of 678,844 678,844 678,844
shares at period
end
NAV per share at 191.0c 171.9c 170.9c
period end
1. Following changes to the Irish REIT legislation introduced in October 2019, if a REIT disposes of an
asset of its property rental business and does not (i) distribute the gross disposal proceeds to
shareholders by way of dividend; (ii) reinvest them into other assets of its property rental business
(whether by acquisition or capital expenditure) within a three-year window (being one year before the sale
and two years after it); or (iii) use them to repay debt specifically used to acquire, enhance or develop
the property sold, then the REIT will be liable to tax at a rate of 25% on 85% of the gross disposal
proceeds, subject to having sufficient distributable reserves. For the purposes of EPRA NTA we have assumed
any such sales proceeds are reinvested within the required three-year window.
2. Deferred tax is assumed as per the IFRS balance sheet. To the extent that an orderly sale of the Group's
assets was undertaken over a period of several years, during which time (i) the Group remained a REIT; (ii)
no new assets were acquired or sales proceeds reinvested; (iii) any developments completed were held for
three years from completion; and (iv) those assets sold were sold at 30 September 2020 valuations, 85% of
the sales proceeds would need to be distributed to shareholders by way of dividend within the required
timeframe or else a tax liability amounting to up to 25% of distributable reserves plus current unrealised
revaluation gains could arise for the Group.
3. The Group uses the fair value option under IAS 40 and has no hybrid instruments or tenant leases held as
finance leases.
4. The Group has no goodwill or intangibles. This is the purchasers' costs amount as provided in the
valuation certificate. Purchasers' costs consist of items such as stamp duty on legal transfer and other
purchase fees that may be incurred, and which are deducted from the gross value in arriving at the fair
value of investment and owner- occupied property for IFRS purposes. Purchasers' costs are in general
estimated at 9.92% for commercial and 4.42% for residential.
5. Following changes to the Irish REIT legislation introduced in October 2019, if the Group ceases to be a
REIT, as defined under Irish legislation, within 15 years of it originally becoming a REIT then a potential
tax liability could arise for the Group.
Financial year ended 31 March 2020
EPRA NRV EPRA NTA1 EPRA NDV2,5
&euro'000 &euro'000 &euro'000
IFRS NAV 1,231,149 1,231,149 1,231,149
Revaluation of - - -
other
non-current
investments
Diluted NAV at 1,231,149 1,231,149 1,231,149
fair value3
Exclude:
Deferred tax in 395 - -
relation to
unrealised gains
on investment
property
Fair value of 234 234 -
financial
instruments
Include:
Fair value of - - (6,380)
fixed interest
rate debt
Unamortised - - (2,698)
arrangement fees
Real estate 138,545 - -
transfer tax4
NAV performance 1,370,323 1,231,383 1,222,071
measure
Diluted number 687,032 687,032 687,032
of shares at
financial year
end
NAV per share at 199.5c 179.2c 177.9c
financial year
end
1 -3 See notes 1-3 in 30 September 2020 table above.
4. The Group has no goodwill or intangibles. This is the purchasers' costs amount as provided in the
valuation certificate. Purchasers' costs consist of items such as stamp duty on legal transfer and other
purchase fees that may be incurred, and which are deducted from the gross value in arriving at the fair
value of investment and owner-occupied property for IFRS purposes. Purchasers' costs are in general
estimated at 9.96% for commercial and 4.46% for residential.
5. See note 5 in 30 September 2020 table above.
EPRA NAV measures using previous calculation basis:
Six months ended Financial year ended
30 September 2020 31 March 2020
&euro'000 Cent per &euro'000 Cent per
share share
IFRS NAV 1,167,061 1,231,149
Deferred 187 395
tax
Fair 187 234
value of
financial
instrumen
ts
EPRA NAV 1,167,435 172.0 1,231,778 179.3
Deferred (187) (395)
tax
Fair (4,641) (6,585)
value of
financial
instrumen
ts1
EPRA 1,162,607 171.3 1,224,798 178.3
NNNAV
Diluted 678,844 687,032
ordinary
shares
issued
1. Difference in fair value of fixed rate private placement notes versus book value (amortised cost)
II.g EPRA capital expenditure
EPRA capital expenditure
Capital expenditure ("capex") during the period is analysed in note 9 according to the EPRA Best Practice
Recommendation Guidelines. All amounts are from the IFRS financial statements of the Group without
adjustment and are reconciled in the table.
Directors and Other Information
Directors Daniel Kitchen (Chairman)
Colm Barrington (Senior Independent
Director)
Roisin Brennan
Thomas Edwards-Moss (CFO)
Margaret Fleming
Stewart Harrington
Grainne Hollywood
Frank Kenny (resigned 29 July 2020)
Kevin Nowlan (CEO)
Terence O'Rourke
Company Secretary Sean O'Dwyer
Assistant Blackglen Corporate Governance Solutions
Secretary Limited
t/a Corporate Governance Solutions
169 Bracken Hill
Sandyford
Dublin D18 R22W
Ireland
Registered office 1WML
Windmill Lane
Dublin D02 F206
Ireland
Company number 531267
Independent Deloitte Ireland LLP
auditor Chartered Accountants and Statutory Audit
Firm
Deloitte & Touche House
29 Earlsfort Terrace
Dublin D02 AY28
Tax adviser KPMG
1 Stokes Place
St. Stephen's Green
Dublin D02 DE03
Ireland
Independent Valuer Cushman & Wakefield
164 Shelbourne Road
Ballsbridge
Dublin D04 HH60
Ireland
Principal banker Bank of Ireland
2 Burlington Plaza
Burlington Road
Dublin D04 X738
Ireland
Depositary BNP Paribas Securities Services, Dublin
Branch
Trinity Point
10-11 Leinster Street South
Dublin D02 EF85
Ireland
Registrar Link Registrars Limited t/a Link Asset
Services
2 Grand Canal Square
Dublin D02 A342
Ireland
Principal legal adviser A&L Goodbody
25/28 North Wall Quay
IFSC
Dublin D01 H104
Ireland
Corporate brokers Goodbody Stockbrokers
Ballsbridge Park
Ballsbridge
D04 YW83
Ireland
Credit Suisse International
One Cabot Square
London E14 40J
United Kingdom
Glossary
AGM is Annual General Meeting.
APM is an Alternative Performance Measure.
BEPS is Bare erosion and profit shifting. It refers to corporate tax planning strategies used by
multinationals to shift profits from higher tax jurisdictions to low tax jurisdictions.
Brexit is the UK exit from the EU.
C&W or Cushman & Wakefield or the Valuer are the Group's external independent Valuer.
Cash passing rent is the gross property rent receivable on a cash basis as at the reporting date. It
includes sundry items such as car parks rent and estimates of rents in respect of unsettled rent reviews.
CBD is Central Business District.
CDP (formerly the Carbon Disclosure Project) is a not-for-profit organisation that runs the global
disclosure system for investors, companies, cities, states and regions to manage their environmental
impacts.
Contracted rent is the annualised rent adjusted for the inclusion of rent that is subject to a rental
incentive such as a rent-free period or reduced rent year.
Developer's profit is the profit on cost estimated by valuers which is typically a percentage of developer's
costs, usually between 10% and 25%.
Development construction cost is the total costs of construction to completion, excluding site and financing
costs. Finance costs are usually assumed at a notional 7% per annum by the Valuer.
DPS is dividend per share.
DRiP or dividend reinvestment plan is a plan offered by the Group that allows investors to reinvest their
cash dividends by purchasing additional shares on the dividend payment date.
EBIT is earnings before interest and tax.
EBITA is earnings before interest, tax, depreciation and amortisation.
EPRA is the European Public Real Estate Association, which is the industry body for European property
companies. It produces guidelines for a number of standardised performance measures (e.g. EPRA earnings).It
is a proxy for the capacity of a company to pay ordinary dividends.
EPRA cost ratio (including direct vacancy costs) is the ratio of net overheads and operating expenses
against gross rental income. Net overheads and operating expenses relate to all administrative and operating
expenses net of any service fees, recharges or other income which is specifically intended to cover overhead
and property expenses.
EPRA cost ratio (excluding direct vacancy costs) is the same as above except it excludes direct vacancy
costs.
EPRA earnings is the profit after tax excluding revaluations and gains and losses on disposals and
associated taxation (if any).
EPRA EPS is EPRA earnings on a per share basis (diluted).
EPRA net asset value ("EPRA NAV") is defined as the IFRS assets excluding the mark to market on effective
cash flow hedges and related debt instruments and deferred taxation on revaluations.
EPRA NAV per share is the EPRA NAV divided by the diluted number of shares at the period end. This measure
has now been superceded by EPRA NRV, NTA and NDV.
EPRA Net Disposal Value ("NDV") represents the shareholders' value under a disposal scenario, where deferred
tax, financial instruments and certain other adjustments are calculated to the full extent of their
liability, net of any resulting tax.
EPRA net initial yield ("NIY") is the passing rent generated by the investment portfolio at the balance
sheet date, less estimated recurring irrecoverable property costs, expressed as a percentage of the
portfolio valuation as adjusted. The portfolio valuation is adjusted by the exclusion of development
properties and those under refurbishment.
EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of debt and derivatives and to include
deferred taxation on revaluations. This measure has now been superceded by EPRA NRV, NTA and NDV.
EPRA Net Reinstatement Value ("NRV") is NAV calculated on a basis that assumes entities never sell assets
and aims to represent the value required to rebuild the entity.
EPRA Net Tangible Assets ("NTA") assumes that entities buy and sell assets, thereby crystallising certain
levels of unavoidable deferred tax.
EPRA 'topped-up' net initial yield is calculated as the EPRA NIY but adjusting the passing rent for
contractually agreed uplifts, where these are not in lieu of rental growth.
EPRA vacancy rate is the Estimated Rental Value ("ERV") of vacant space divided by the ERV of the whole
portfolio, excluding developments and residential property. This is the inverse of the occupancy rate.
EPS or earnings per share is the profit after taxation divided by the weighted average number of shares in
issue during the period.
Equivalent yield is the weighted average of the initial yield and reversionary yield and represents the
return that a property will produce based on the occupancy data of the tenant leases.
ERV or estimated rental value is the Valuer's opinion as to what the open market rental value of the
property is on the valuation date, and which could reasonably be expected to be the rent obtainable on a new
letting on that property on the valuation date.
Fair value movement is the accounting adjustment to change the book value of the asset or liability to its
market value.
FRI lease is a full repairing and insuring lease.
Gale date is the date on which rent is due.
GDV is gross development value.
GRESB is a sustainability benchmark for property assets.
Grey space is surplus space offered by tenants for letting by sub-tenants.
Gross rental income is the accounting-based rental income under IFRS. When the Group provides incentives to
its tenants the incentives are recognised over the lease term on a straight-line basis in accordance with
IFRS. Gross rental income is therefore the passing rent as adjusted for the spreading of these incentives.
Hibernia is Hibernia REIT plc, the Company or the Group.
IFRS are International Financial Reporting Standards.
'In-place' portfolio is the portfolio of completed properties, i.e. excluding active development and
refurbishment projects and land.
IPD is the Investment Property Databank Limited which is part of the MSCI Group and produces as independent
benchmark of property returns (IPD Ireland Index) and which provides the Group with the performance
information required in calculating the performance-based management fee.
IPMS are the international property measurement standards as issued by the Royal Institute of Chartered
Surveyors.
Lease incentive is any consideration or expense, borne by the Group, in order to secure a lease.
LEED ("Leadership in Energy and Environmental Design") is a Green Building Certification System developed by
the US Green Building Council. Its aim is to be an objective measure of building sustainability.
Loan to value ("LTV") is the ratio of the Group's net debt to the value of its investment properties.
Long-term incentive plan ("LTIP") aims to encourage senior management retention and align their interests
with those of the Group through the payment of rewards based on the Group's long-term performance through
shares in the Company that vest after a future period of service.
Market Abuse Regulations are issued by the Central Bank of Ireland and can be accessed at
https://www.centralbank.ie/regulation/securities-markets/market-abuse/Pages/default.aspx [4].
MDD is modified domestic demand. It is defined as total domestic demand net of trade in aircraft by leasing
companies and investment in intellectual property.
MSCI/SCSI Ireland Quarterly Property All Assets Index ("MSCI Ireland Index") is the index produced by MSCI
which measures the return of the property market in Ireland for all asset classes and which is calculated by
MSCI both including and excluding Hibernia assets and is used to calculate our KPI 'Total property return'
or TPR.
NAV is the net asset value.
NAVPS is the NAV in cent per share.
Net development value is the external Valuer's view on the end value of a development property when the
building is fully completed and let.
Net equivalent yield is the weighted average income return (after allowing for notional purchaser's costs) a
property will produce based on the timing of the income received. As is normal practice, the equivalent
yields (as determined by the external Valuer) assumes rent is received annually in arrears.
Net lettable or net internal area ("NIA") is the usable area within a building measured to the internal face
of the perimeter walls at each floor level.
Net reversionary yield is the expected yield after the rent reverts to the ERV.
Occupancy rate is the estimated rental value of let units as a percentage of the total estimated rental
value of the portfolio, excluding development properties.
Passing rent is the annualised gross property rent receivable on a cash basis as at the reporting date. It
includes sundry items such as car parks rent and estimates of rents in respect of unsettled rent reviews.
PC is practical completion.
Property income distributions ("PIDs") are dividends distributed by a REIT that are subject to taxation in
the hands of the shareholders. Normal withholding tax still applies in most cases.
PP are private placement notes, effectively private loan notes.
PRS is the private rental sector which refers to residential properties held for rent.
Psf is per square foot.
RCF is revolving credit facility.
REIT is a Real Estate Investment Trust. Irish REITs follow section 705E of the Taxes Consolidation Act 1997.
Remuneration Policy: the remuneration policy approved by shareholders at the 2018 AGM and which took effect
from 27 November 2018.
Reversion is the rent uplift where the ERV is higher than the contracted rent.
Royal Institute of Chartered Surveyors ("RICS") Professional Standards, RICS Global Valuation Practice
Statements and the RICS Global Valuation Practice Guidance - Applications contained within the RICS
Valuation - Global Standards 2019 (the "Red Book") issued by the Royal Institute of Chartered Surveyors
provide the standards for preparing valuations on property.
Shadow space is also referred to as grey space (see definition above.
Sq. ft. is square feet.
TCFD is the Financial Stability Board Task Force on Climate-related Financial Disclosures.
Tenant or lease incentives are incentives offered to occupiers on entering into a new lease and may include
a rent free or reduced rent period, or a cash contribution to fit-out. Under accounting rules, the value of
these incentives is amortised through the rental income on a straight-line basis over the term of the lease
or the period to the next break point.
Term certain is the lease period to the next break or expiry.
Total accounting return ("TAR") measures the absolute growth in the Group's EPRA NAV per share plus any
ordinary dividends paid.
Total Property Return ("TPR") is the return for the period of the property portfolio (capital and income) as
calculated by MSCI, the producers of the IPD Ireland Index.
Total shareholder return ("TSR") is the growth in share value over a period assuming dividends are
reinvested to purchase additional units of stock.
Traditional core is the historic central business district of Dublin, centred around St. Stephen's Green and
Merrion Square.
Transparency regulations enhance the information made available about issuers whose securities are admitted
to trading on a regulated market and further information is available on
https://www.centralbank.ie/regulation/securities-markets/transparency/Pages/default.aspx [5].
USPP is US private placement notes, effectively private loan notes.
Valuer is the independent valuer appointed by the Group to value the Group's investment properties at the
date of the consolidated financial statements. From September 2017 the Group has used Cushman and Wakefield.
Previously the Group has used CBRE.
WAULT is weighted average unexpired lease term and is variously calculated to break, expiry or next review
date.
=-----------------------------------------------------------------------------------------------------------
1. 91% of contracted rent
2. 9% of contracted rent
3. Like-for-like change (incl. finance costs) on Investment Property and excluding assets acquired and
disposed of during the period
[4]. Total Property Return is the return of the property portfolio (capital and income) as calculated by
MSCI.
5. An alternative performance measure ("APM"). The Group uses a number of such financial measures, which are
not defined under IFRS. In particular, measures defined by EPRA are an important way for investors to
compare real estate companies. Please see Supplementary Information at the back of this release for further
details.
[5] Existing income within this figure represents &euro29 per buildable square foot
[6] To calculate the net development value standard purchasers' costs used are 9.92%
[7] 91% of Group contracted rent
[8] 9% of Group contracted rent
ISIN: IE00BGHQ1986
Category Code: IR
TIDM: HBRN
LEI Code: 635400MHRA4QVVFTON18
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited
reviews
Sequence No.: 87991
EQS News ID: 1148603
End of Announcement EQS News Service
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(END) Dow Jones Newswires
November 17, 2020 02:00 ET (07:00 GMT)
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