PRELIMINARY RESULTS FOR THE YEAR TO 30 JUNE 2018

Development completions adding substantially to 11% profit growth;
€600m future development pipeline;
EPRA NAV per share 179 cent

  Dublin, 18 September, 2018 – Green REIT plc, (“Green REIT” or the “Company”), the Irish property investment company, today announces its results for the year ended 30 June 2018.

30 June 2018 30 June 2017 Change
Profit after Tax €144.2m €129.8m +11%
EPRA Earnings €36.9m €33.0m +12%
Portfolio Valuation €1,424.4m €1,381.4m +3%
IFRS NAV per Share 180.3 cent 166.9 cent +8%
EPRA NAV per Share  178.9 cent 165.6 cent +8%
IFRS NAV €1,251.6m €1,152.2m +9%
Total Return 13.4% 12.7% +0.7 pps
Property LTV 15.5% 20.2% -4.7 pps
Basic EPS 20.8 cent 18.9 cent +10%
EPRA EPS 5.3 cent 4.8 cent +11%
Proposed Dividend per Share (full year) 5.3 cent 5.0 cent +6%

 

  • Profitable capital recycling from retail to logistics and offices
  • Development success a key driver to profit and income growth
  • Income security at an all-time high of 8.8 years
  • Positive outlook underpinned by €600 million future development pipeline and favourable economic growth trajectory

 

KEY FINANCIALS

  • Profit for the period up 11% to €144.2 million (2017: €129.8 million). 10% uplift in EPS to 20.8 cent (2017: 18.9 cent)
  • 12.4% increase in rental income to €67.9 million (2017: €60.4 million)
  • EPRA NAV per share up 8% to €1.79 per share, post payment of 2.6 cent per share interim dividend in March 2018 and an increase in stamp duty from 2% to 6% in October 2017 (8 cent NAV impact)
  • Total return 13.4% (2017: 12.7%) based on growth in EPRA NAV and dividends paidPortfolio valued at €1,424 million (2017: €1,381 million)
  • Property revaluation surpluses of €109.2 million, 16% higher than the prior year
  • 12% growth in EPRA Earnings to €37 million and 11% increase in EPRA EPS to 5.3 cent per share
  • LTV remains low at 15.5%, with undrawn facilities at year end of €139 million providing further capital for deployment into development pipeline
  • Proposed full year dividend of 5.3 cent per share, a 6% increase over prior year, equating to 3% on June 2018 NAV. Guidance of a dividend of 4% per annum on NAV post current development programme remains

 

 

STRATEGIC & OPERATIONAL HIGHLIGHTS

PROFITABLE CAPITAL RECYCLING FROM RETAIL TO LOGISTICS AND OFFICES

  • Sale of Westend Retail Park in June 2018 for €147.7 million, representing a 55% profit on cost
  • Retail exposure reduced to less than 1% of total portfolio value
  • €260 million of disposals (75% of which was retail) since inception, at a 57% profit on cost
  • Logistics approaching 8% of portfolio value post the current phase of development, with a target sectoral allocation in excess of 20% over the medium to longer term as Horizon Logistics Park is developed out

 

DEVELOPMENT SUCCESS A KEY DRIVER TO PROFIT AND INCOME GROWTH

  • €10.4 million of new contracted annual rent added from developments in the year to 30 June 2018, with a further €1.7 million added post period end
  • Current and completed development programme, generating 8.4% yield on cost, accounts for 28% of portfolio value, with 84% de-risked through lettings
  • Completion of flagship One Molesworth Street, Dublin 2, adding €5.3 million to contracted annual rent and 6.1 cent/€42.3 million to NAV in FY18
  • Completion and full letting of 5 Harcourt Road, Dublin 2, adding €3.1 million of contracted annual rent and 2.9 cent/€20.4 million to NAV in FY18
  • Construction of Building I in Central Park well underway, totalling 9,000 square metre (97,000 square feet) of office space, with completion in Q1 2019
  • Potential future development of 37,200 square metres (400,000 square feet) at Central Park, post Building I
  • Completion of three further units at Horizon Logistics Park, including an 80,000 square foot unit for Kuehne + Nagel. Construction of two further speculative units to commence shortly, along with a large purpose built unit of 115,000 square feet for Bunzl (subject to planning)
  • Further 28 acres of land acquired at Horizon Logistics Park, bringing total land holding to circa 300 acres, providing short, medium and longer term optionality

 

INCOME SECURITY AT ALL-TIME HIGH OF 8.8 YEARS

  • WAULT of 8.8 years across the portfolio, a record high for the Company
  • Contracted annual rent of €71.7 million at 30 June 2018, including €10.4 million in new rent from developments and €1.1 million from investment properties. Further increased to €74.3 million following additional letting activity since 30 June 2018
  • Eight rent reviews settled, achieving an 11%/€1.2 million annual rental uplift to €12.5 million
  • €1.1 million of new annual rent secured through new lettings on our investment properties
  • Breaks not exercised by tenants with total annual rent of €5 million, with seven years of additional term certain at Central Park (€2.2 million annual rent) and nine years in George’s Court (€2.3 million annual rent)
  • Period end EPRA vacancy rate of 4.4% (30 June 2017: 1.5%), subsequently reduced to 2.8% through lettings secured since 30 June 2018
  • 5% reversionary potential across the standing portfolio

 

Positive outlook underpinned by €600 million FUTURE development pipeline and FAVOURABLE economic growth trajectory

  • Future development pipeline with an end value projection of €600 million, 43% greater than value of programme to date and with an estimated €37 million annual rent roll
  • 7.2% expected yield on cost for future developments, highly accretive to shareholder value
  • Demand for high quality office and logistics space remains robust, with four of the top 10 Dublin office occupiers having major additional requirements
  • Irish economic growth set to continue, supporting real estate markets and underpinning our positive outlook

 

Gary Kennedy, Chairman of Green REIT plc, commented: “Our strategic focus continues to be on driving risk adjusted returns for shareholders. This has been another year of strong contributions from our development schemes both to NAV and to the income base which drives our dividends. We have further reweighted the portfolio towards our key sectors of offices and logistics, through effective capital recycling, and we look forward to creating additional value by capturing the development potential at Central Park and Horizon Logistics Park.”

 

Pat Gunne, Chief Executive of Green Property REIT Ventures, added: “The past 12 months has been great for us on all fronts, particularly our development success across our major office projects and our profitable capital recycling programme from the retail sector into logistics, where we believe there are strong growth prospects. The Irish property market remains well supported by our growth economy, our expanding employment base, and a diverse international investor set which continues to find our market attractive, underpinning our positive outlook.”

ENDS

Download our preliminary results presentation here

Watch the Green REIT plc preliminary results webcast here