TIDMYEW
RNS Number : 9439J
Yew Grove REIT PLC
27 August 2021
This announcement is released by Yew Grove REIT plc and contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) 596/2014 ("EU MAR") and for the purposes of
Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms
part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("UK MAR"), and is disclosed in accordance
with the company's obligations under Article 17 of EU MAR and
Article 17 of UK MAR .
27 August 2021
Yew Grove REIT plc
(the "Company" or, together with its subsidiaries, the
"Group")
Interim results for the six months ended 30 June 2021
The Company is today reporting its unaudited condensed
consolidated results for the six months period ended 30 June 2021
(the "Period").
Strategic Highlights
-- Continued strong rent collections for H1 2021 in excess
of 99%
-- Quarterly dividend payments continued with total aggregate
year-to-date dividend distribution per ordinary share
of 2.55 cents declared for H1 2021 (H1 2020: 2.45 cents)
-- 13,350,000 million new ordinary shares issued in April
2021 at EUR0.95 per share
-- Two properties purchased within eight weeks of share
issuance for EUR19.0 million
-- Admission to the regulated market of Euronext Dublin
completed, satisfying the requirements of the REIT rules
-- 100 million share issuance programme refreshed at the
EGM in May 2021
-- Forward funding of the new extension for a life sciences
tenant started on Athlone campus
-- Asset management has enhanced the Company's property
portfolio and revenue, including 20,000 square feet of
office vacancy being let in early January 2021
-- Strong pipeline of potential acquisitions continues
Financial Highlights
-- Net Asset Value ("NAV") per ordinary share was 100.64
cents as at 30 June 2021 (31 December 2020: 100.03 cents)
-- Portfolio valuation on 30 June 2021 of EUR168.1 million
(31 December 2020: EUR141.9 million)
-- Period property valuation gain of EUR2.1 million (1.3%)
after absorbing the costs of 2021 property purchases
-- Properties owned throughout the period increased in value
by 2.4%
-- Annualised rent roll of EUR12.8 million at Period end
(31 December 2020: EUR10.9 million)
-- Period net revenues were EUR5.7 million, an increase
of 8.1% on H1 2020
-- Administration expenses were EUR2.5 million (H1 2020:
EUR1.4 million), this included exceptional costs of EUR0.9
million for listing on the regulated market of Euronext
Dublin
-- Diluted EPRA earnings per share ("EPS") of 2.14 cents
(H1 2020: 2.76 cents)
-- Credit facility drawings increased from EUR38.3 million
to EUR49.5 million over the Period, leaving additional
undrawn headroom of EUR3.8 million and cash of EUR11.3
million
-- Company loan to value ratio of 29.6%, an increase from
27.2% as at 31 December 2020
Portfolio Highlights
The Group's portfolio as at 30 June 2021:
-- Weighted average unexpired lease terms of 4.6 years to
break and 7.8 years to expiry (31 December 2020: 4.1
years to break and 7.2 years to expiry)
-- Strong tenant covenants: (22% government and other state
bodies, 71% FDI, 4% large enterprises and 3% SME by rent
roll)
-- Gross yield at fair value of 7.6%, with a gross reversionary
yield of 8.4% (31 December 2020: 7.7% and 8.7% respectively)
-- Vacancy rate reduced over the period to 4.7% (31 December
2020: 6.4%)
-- Reversionary rent roll of EUR14.2 million (31 December
2020: EUR12.4 million)
Jonathan Laredo, Chief Executive Officer, commented:
"In the first half of 2021, Ireland continued to work from home.
Despite the strains imposed on all by the Covid-19 pandemic, the
Company delivered leading rent collections, a growing rent roll and
stability of its portfolio valuation. The Company has raised and
deployed further equity capital, increased its office and
industrial asset portfolios and rent roll, reduced vacancy and
begun its first industrial development for a life sciences tenant.
We have a programme of additional asset management works underway
and an identified pipeline of accretive investments.
Yew Grove REIT is the only REIT predominantly focussed on
investing in the office and industrial sectors of the Irish real
estate market outside of Dublin's traditional central business
district. The Company's focus on government and FDI tenants
continues to support its quarterly dividends. We have been
particularly pleased with the expansion of our life sciences campus
in Athlone. This validates Yew Grove REIT's differentiated
strategy, targeting well tenanted commercial real estate, and I
look forward to continuing this in the second half of the
year."
For further information contact:
Yew Grove REIT plc +353 1 485 3950
Jonathan Laredo, Chief Executive
Officer
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Charles Peach, Chief Financial Officer
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Michael Gibbons, Chief Investment
Officer
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Goodbody Stockbrokers UC +353 1 667 0400
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Joint Broker & Euronext Sponsor
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David Kearney, John Flynn, Edel O'Reilly,
Linda Clarke
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Liberum Capital Limited
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Joint Broker & Nomad +44 20 3100 2000
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Richard Crawley, Jamie Richards
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IFC Advisory +44 203 934 6630
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Financial PR yewgrovereit@investor-focus.co.uk
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Tim Metcalfe, Graham Herring
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Forward-looking Statements
Certain information contained in this announcement may
constitute forward looking information. This information relates to
future events or occurrences or the Company's future performance.
All information other than information of historical fact is
forward looking information. The use of any of the words
"anticipate", "plan", "continue", "estimate", "expect", "may",
"will", "project", "should", "believe", "predict" and "potential"
and similar expressions are intended to identify forward looking
information. This information involves known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such forward
looking information. No assurance can be given that this
information will prove to be correct and such forward looking
information included in this announcement should not be relied
upon. Forward looking information speaks only as of the date of
this announcement. The forward looking information included in this
announcement is expressly qualified by this cautionary statement
and is made as of the date of this announcement. The Company and
its group does not undertake any obligation to publicly update or
revise any forward-looking information except as required by
applicable securities laws.
Notes to editors
Yew Grove REIT plc, quoted on the regulated market of Euronext
Dublin and the London Stock Exchange's AIM market, is an Irish
commercial real estate company invested in a diversified portfolio
of Irish commercial property. Yew Grove has a particular focus on
well-tenanted commercial real estate assets comprising of office
and industrial assets outside of Dublin's Central Business
District.
Yew Grove's highly experienced team has a proven track record in
commercial property investment and asset management in Ireland and
internationally and is focused on delivering results. Its
investment approach is strategic, not speculative, principally on
assets that are let, pre-let or to be let after refurbishment.
Shareholders are provided with stable, long-term income from a
diverse portfolio of commercial property comprising well-tenanted
real estate in strategic centres let to Irish government entities
and other state bodies, IDA Ireland supported and other FDI
companies, and larger corporates.
INTERIM REPORT AND CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
For the six months period to 30 June 2021
Chief Executive Officer's Statement
I am pleased to report the results for Yew Grove REIT plc (the
"Company") for the six months period ended 30 June 2021 ("the
Period").
The Covid-19 pandemic and its effects have lasted far longer and
have been further reaching than most of us expected last year.
Today, despite the vaccine rollout and its relative success in
containing infection and hospitalisation rates, most Irish
office-based workers are still working from home and the latest
indications are that an effective return to the office, even on a
parttime basis, will not occur before September 2021. However, the
beginning of a return to normality has begun with the announcement
in late July 2021 of quarantine free travel for vaccinated adults
and the consequent increase in airline traffic and hotel
occupation.
In April 2021 we issued 13.4 million shares to raise
approximately EUR12.7 million and invested the proceeds alongside
debt facility drawings in three new properties. In May 2021, we
moved the Company's listing from the Enterprise Securities Market
to the main regulated market of Euronext Dublin, fulfilling the
final requirement of the Irish REIT legislation, and throughout the
Period our ongoing asset management continued to reduce vacancy,
increase our rent roll and improve the environmental impact of our
portfolio.
As we look forward to the rest of the year, it appears that the
recovery in the investment market which began in the first half of
the year will accelerate and an increase in the pipeline of
investment properties may well be matched by more institutional
investors prepared to buy those properties. The Company's proven
track record since IPO of capitalising on excellent investment
opportunities, coupled with our value-enhancing asset management
and attractive dividend yield offers investors a strong proposition
to participate in the future growth of the Company.
Dividends
Dividends declared for the first two quarters of 2021 totalled
2.55 cents per share and were reduced by the exceptional costs of
moving to the regulated market of Euronext Dublin (as required
within three years by the Irish REIT rules). That cost, which was
written off against revenue, reduced the Company's net income by
0.8 cents. However, the business profits continue to grow,
dividends evidence a similar progression to last year and we expect
that to continue.
Review of activity
In the first half of 2021, the Company completed purchases of
three buildings: a newly constructed industrial building in Dundalk
and two office buildings on the CityWest Business Park in South
West Dublin. We began the construction of a new life science
building at our campus on the IDA Ireland park in Athlone and I am
pleased to report that work there is ahead of schedule. We also
agreed the sale of two of our remaining three non-Core buildings
with these sales completing just after the Period end date. We are
confident that the final sale, which is progressing well, will also
complete in short order. Similar to last year we have focused on
asset management with a number of rent reviews, regears and new
leases signed during the Period and with even more underway as we
report. The effect of this activity was to increase the contracted
rent roll to EUR12.8 million from EUR10.9 million over the Period
with a WAULT to break of 4.6 years and to lease end of 7.8 years as
at 30 June 2021. Vacancy was reduced to 4.7% from 6.9% over the
Period. The effects of this activity have been reflected in the 30
June 2021 external valuation. Excluding the three properties
available for sale at 30 June (two of which completed in early
July) and the development in Athlone we have a portfolio of
EUR161.7 million with a contracted rent roll of EUR12.3 million and
a reversionary rent roll of EUR13.8 million. On completion of the
development early next year, that rent roll should increase by
almost EUR1.0 million.
Post balance sheet events
We completed the sales of non-Core properties in Listowel and
Portarlington in July 2021 and the sale of the Bridge Centre in
Tullamore continues and is expected to complete in September.
Despite the negative sentiment towards retail businesses depressing
the sale price of the Bridge Centre, the combined net sale prices
on these non-Core assets are expected to give a gain over the book
value at the start of the Period.
Property Valuation
Pro-active asset management has driven a like for like property
value increase across the board by 2.4%. Much of this increase was
reflected in our March 2021 valuation update (for our move to the
regulated market of Euronext Dublin) and reflects letting activity
in our regional office portfolio. However, a more detailed look at
the valuations highlights a few interesting points. Our like for
like portfolio increased in value by 2.4%, almost entirely due to
letting vacant space. As our asset management continues to improve
rents and improve tenant quality and building standards, we are
confident that there is still more value growth across this part of
our business. Our industrial portfolio includes some exposure to
traditional industrial buildings alongside a significant exposure
to life sciences buildings and their tenants. The traditional
industrial part of the portfolio has increased its value
significantly in the Period (+20.4%) partly reflecting the movement
in the wider market and partly anticipating the effect of our asset
management projects which are continuing. Our life sciences
portfolio has seen a value increase of 0.9%. We believe that given
strong international interest in this sector abroad and the
increasing focus on opportunities in Ireland by institutional
investors this part of our portfolio is due significant growth and
that should be reflected in valuations over the next two years.
The new properties acquired in the first half of 2021, (an
industrial building in Dundalk and offices in the CityWest Business
Park in Dublin) were valued above their purchase prices but not
sufficiently to cover the costs of acquisition. We see significant
value in the Dundalk acquisition and believe that it should cover
its costs quickly. We believe CityWest has significant asset
management potential and expect that value to improve over the
medium term.
F inance
The first half of the year demonstrated financial as well as
operational resilience. Diluted NAV per share increased by 0.57
cents to 100.34 cents due to upward momentum in our property
valuations. Despite the exceptional cost of moving to the regulated
market of Euronext Dublin (EUR900k), the Company declared dividends
for 2021 of 2.55 cents (0.10 cents higher than H1 2020) and
absorbed the costs of a share issue at 95 cents and acquisition
costs on c. EUR19 million of new property.
Our property portfolio has increased in value by over 18% in the
Period and even after discounting the additions, the realised and
unrealised gains added over EUR2.1 million to the balance sheet.
Our continued asset management and a positive backdrop to the
markets in which we operate should see more upward pressure on
values. Our annualised contracted rent roll now exceeds EUR12.8
million and administration costs are still contained which bodes
well for the rest of the year. The net debt loan to value ("LTV")
ratio is still relatively light at 22.9% versus 19.6% at year end,
but when we account for the commitments on our Athlone development,
the Company has relatively little additional capacity in the
current debt facility.
Irish Commercial Real Estate Market
The first quarter was the busiest on record(1) but that was
largely a reflection of international investors' interest in the
private residential sector and the large deals in that sector held
over from 2020. Investment activity in the office sector remains
more muted, albeit starting to pick up in Q2 2021. Prime central
Dublin office yields, where most transactions have taken place,
have held steady, but at slightly lower rental levels than
pre-Covid-19 highs at a level of circa EUR57.50 psf versus EUR62.50
psf.(2)
In the regional and suburban office markets, there were few
transactions but interestingly in the second quarter One Navigation
Square, a newly constructed building in Cork, was sold to Corum
Butler (a French investor) at a net initial yield ("NIY") of c.4.5%
and a near term reversionary yield of c.6.4%.(3)
As the Period progressed there was increasing tenant activity,
despite the fact that there was still limited return to the office
and government guidance on work from home is expected to remain in
place until at least September 2021. Regional office letting
activity still appears strong with Cork, Galway and Limerick
reducing net vacancy(4) over the Period. This was most noticeable
in Cork, which has seen over 1 million sq ft of new offices
delivered in 2020 and 2021, and in Galway, two new building schemes
will add over 780,000 sq ft of Grade A office between the end of
2021 and 2022, increasing Galway's office space by almost 25%. The
development in both cities dwarfs the normal annual take up, but
new rentals at between EUR32 to EUR37 psf (versus pre-construction
highs in the low EUR20s psf) to tenants who have either been newly
attracted to the areas by these developments or used the
developments to make major expansions which would not otherwise
have been possible in the cities, have meant take up is increasing
to new levels. Demand from tenants, especially for new, Grade A
buildings continues and net vacancy in Galway is at multi year
lows. In Limerick there has been little new construction and most
of the planned new development, around the Opera site in the
centre, is to satisfy Government requirements.
The industrial market in Ireland, like the rest of Europe, has
seen huge demand both from investors and tenants. Net vacancy has
fallen to record lows, especially for well situated and large
and/or modern buildings with a consequent increase in lease rates
and lengths demanded. The principal issues constraining this market
are the lack of available larger building footplates and steel
framed buildings with ceiling heights that satisfy tenant
requirements. As investors have chased relatively few transactions,
discount rates have fallen, evidenced by NIYs on transactions in
and around Dublin approaching 4.5% and those in Cork just above 5%.
Demand has been especially strong for portfolios and the mooted
auction of the Core Industrial portfolio (which includes older
tertiary industrial properties within commuting distance of Dublin)
could see this market reach new highs.
Environmental, Social and Governance
Our environmental and sustainability efforts are reviewed in the
property section of this report and despite Covid 19 we are now
well into the overall improvement of our existing estate, with
ongoing projects both to improve the internal quality and energy
efficiency of our buildings as well as the landscaping and
environmental quality of their locations. This is, as I reported in
December, an ongoing effort and our achievements will be reflected
both in qualitative measures such as tenant annual surveys of
occupier satisfaction and objective measurements of improved energy
use and reduced greenhouse gas emissions when measured on a like
for like basis.
One of our key community objectives for 2021 has been to engage
with at least two local institutes or universities to see how we
can better contribute to improving the local environments. In
April, we led a fireside chat called "An Introduction to REITs" for
the students of the National University Ireland Galway, allowing
them to explore our business and ask questions they had about it in
an informal manner, while learning about REITs and the European
commercial real estate market. We also completed our engagement as
the subject of the CFA Society of Ireland's annual CFA Research
Challenge. Students from eight Irish universities had the
opportunity to produce their own research analysis of the Company
for the challenge. Executives from the Company presented to the
students and their mentors, followed by questions and answer
sessions to provide further explanation of the Company and its
market. Each student team's research report was presented to a
group of Senior Portfolio Managers and Chief Investment Officers in
the Irish market before a winner was chosen to progress to the
regional and global finals. We wish them all well and thank them
for their efforts and insight. We hope that these and other planned
events give those with an interest in the Company and its
properties a better understanding of the Company's business,
conduct and market.
The Company has continued its support of two nominated local
charities, the Society of St. Vincent de Paul and the Peter McVerry
Trust, in addition to individual employee contributions. The
Company also supported Children in Hospital Ireland ("CIH") as our
employees volunteered for CIH's "Packing Project" by assembling
c.2,500 age-appropriate isolation packs of various crafts and toys
for children in isolation across twenty Irish hospitals.
Whilst governance standards are excellent, especially given our
relatively small size, Yew Grove would ideally improve its
diversity both at employee and leadership level. However, the only
way to do that at employee level is through new hires: the Company
is small and hiring is constrained and since its inception there
has been no staff turnover so changes will continue to be gradual.
At Board level, the Company is considering ways in which the Board
diversity might be enhanced.
Outlook
The short-term outlook for our market is positive. Despite
uncertainty triggered by the rise of new Covid variants, the
success to date of the vaccine rollout in Europe and the consequent
reduction in hospitalisations and death rates means that most
European economies can look forward to a return to some version of
normality. In Ireland, despite the relative stringency of the
lockdown, the economy has been buoyed by the strength of the
multinational sector. When combined with a rapid increase in the
domestic savings rate this augurs well for the economy in late 2021
and 2022. Given the strength of the sectors that make up most of
Ireland's inward investment, we would expect continued growth in
demand for properties and despite the changing requirements for
offices, demand for quality office space will, except in Dublin,
outstrip supply creating a more segmented market across the country
and driving rental growth.
In the industrial market, the effect of reopening on retail
demand and the continued need for domestic logistic and cold
storage space, as the impact of Brexit continues to reverberate,
will increase pressures on well situated properties especially with
larger footplates as tenants continue to vie for space. The life
science sector, Ireland, unlike the UK or US, relies on larger,
developed businesses who site in-country as part of the inward
investment drive led by IDA Ireland. These businesses look to site
close to existing clusters of similar life science businesses and
require purpose built advanced technology buildings. Initial demand
is usually met through IDA Ireland development and subsequent
growth is largely left to the private sector. We expect inward FDI
demand to continue to increase as international business travel
eases and businesses again focus on global expansion.
In the medium term, the success of the economy depends largely
on the success of Ireland's inward investment policy and how it
navigates the changing geo-political landscape as governments try
to tackle the digital age and progress globally coordinated
policies on tax and climate change. Despite the political
difficulties Brexit has and will continue to cause, it should
provide an opportunity for Ireland over the next few years and
provided the value of multinational businesses to Ireland continues
to be recognised by the electorate and politicians, the future
looks positive.
Jonathan Laredo
Chief Executive Officer
26 August 2021
(1) See Savills Ireland: Ireland Investment Market 2021
(2) See CBRE: Dublin Office Market View Q2 2021
(3) Quinlan R, 2021, 'French investor acquires Cork docklands
office for EUR60m', The Irish Times, 21 May 2021
https://www.irishtimes.com/business/commercial-property/french-investor-acquires-cork-docklands-office-for-60m-1.4571304
(4) Cushman & Wakefield Marketbeat. Cork Market Office Q1
2021, Cushman & Wakefield Marketbeat. Limerick Market Office Q1
2021, Cushman & Wakefield Marketbeat. Galway Market Office Q1
2021
Key Performance Indicators
The results of the Company and the entities controlled by the
Company (its subsidiaries) (together the "Group") for the Period,
30 June 2021, are set out in the Consolidated Statement of
Comprehensive Income. The profit for the Period was EUR4.7 million,
including unrealised gains on investment properties of EUR2.1
million (H1 2020 EUR1.3 million and unrealised loss of EUR1.8
million respectively).
The Group's key performance indicators ("KPIs") are chosen to be
specific to the Company's sector, to provide a measure of the
Group's performance and to show progression against the Company's
investment objectives.
KPI Relevance to Strategy
NAV per share The NAV reflects the Company's ability
to deploy its capital in a value enhancing
manner.
---------------------------------------------
Dividend per share The dividend reflects the Company's ability
to deliver a sustainable income stream
from its investment properties.
---------------------------------------------
EPRA NTA per share The EPRA NTA reflects the Company's ability
(5) to deploy its capital in a value enhancing
manner that can be compared with its peers.
---------------------------------------------
Total shareholder return The total shareholder return demonstrates
(5) the Company's ability to generate returns
for its shareholders.
---------------------------------------------
NAV total return (6) The NAV total return demonstrates the
Company's ability to generate value and
dividend returns.
---------------------------------------------
Performance against KPIs
The Company is quoted on the AIM market of the London Stock
Exchange and, since May 2021, listed on the regulated market of
Euronext Dublin. As the Company's shares often trade at different
prices on each exchange, both have been shown below. The NAV total
return is shown alongside the total shareholder return for each
exchange.
Group NAV Dividend EPRA NTA Euronext LSE total NAV total
per share per share per share total shareholder shareholder return for
(5) return for return for the Period(6)
the Period the Period
Year ended
31 December
2020 100.03c 4.79c 99.77c -4.55c -10.40c 6.30c
============== =========== =========== =========== =================== ============= ===============
Period ended
30 June
2020 97.39c 2.24c 97.22c -4.23c -7.10c -0.40c
============== =========== =========== =========== =================== ============= ===============
Period ended
30 June
2021 100.64c 2.65c 100.34c 20.46c 23.46c 3.26c
============== =========== =========== =========== =================== ============= ===============
W e are keen to provide KPIs and details that also explain the
NAV total return performance of the Company. The Company has grown
in 2021, both in terms of size of property portfolio (by EUR26.2
million or 18.4%), annualised rent roll (by EUR1.9 million or
17.5%) and reversionary rent roll (by EUR1.8 million or 14.5%).
Even though the Company paid EUR1.7 million in acquisition costs in
the Period, the portfolio made sufficient realised and unrealised
property valuation gains to increase the Group's NAV over a testing
Period. The aggregate value of the Company's property portfolio now
exceeds its aggregate purchase cost (including transaction costs,
which are currently circa 8.5%), and its value is increasing in
line with management expectations.
(5) Alternative Performance Measures ("APMs"). The Company uses
a number of financial measures to describe its performance which
are not defined under International Financial Reporting Standards
("IFRS") and which are therefore considered APMs. In particular,
measures developed by the European Public Real Estate Association
("EPRA") are reported in line with other public real estate
companies. These are defined in more detail, and reconciled with
IFRS where applicable, in the Alternative Performance Measures
section.
(6) The NAV total return measures the return according to IFRS
NAV and dividends paid, showing the sum of the IFRS NAV change and
dividends paid over the period. It is similar to total shareholder
return, except for its use of IFRS NAV in place of share price.
Operational Metrics
The Company uses operational performance metrics that allow the
Company's property operations to be compared with others in its
sector or peer group.
The Company's purpose and investment objective, as laid out in
the admission document is to:
-- provide shareholders with high, good quality income;
-- pay a covered dividend and generate an attractive
risk-adjusted total return for shareholders;
-- build a portfolio of Irish commercial office and industrial
property assets to support a high and sustainable share dividend
while achieving moderate capital growth; and
-- ensure that the investment properties be tenanted principally
by Government and corporate tenants with favourable credit
profiles.
The Company intends to pay most of its comprehensive income
(excluding fair value gains or losses on investment properties) to
shareholders by way of quarterly dividends. The interim dividends
(declared from earnings for the first two quarters of 2021) were
2.55 cents per share for a total of EUR3.0 million.
The primary operational metrics used by the Directors to measure
the Company's progress in achieving its investment objectives are
illustrated below.
The quality of the Company's income is measured with reference
to the creditworthiness of its tenants. The changes over the Period
in the Company's contracted rent roll by tenant type and vacancy as
a percentage of ERV are shown below:
% of contracted rent roll
Government/quasi FDI Large Enterprise SME Vacancy
Government as a %
of ERV
----------------- ------ ----------------- ----- --------
31 December
2020 25.7% 66.5% 4.0% 3.8% 6.9%
----------------- ------ ----------------- ----- --------
30 June 2021 22.3% 70.6% 3.4% 3.8% 4.7%
----------------- ------ ----------------- ----- --------
Period change -3.4% 4.1% -0.6% 0.0% -1.8%
----------------- ------ ----------------- ----- --------
Over the Period, the Company's portfolio grew by 18.4%, and the
tenants expected to have more favourable credit profiles
(Governmental and FDI together) increased their share of the
increased contracted rent roll by 0.7%. Vacancy as a percentage of
ERV fell to 4.7% over the year, primarily due to the letting of
half of the Cork Airport Business Park property.
Additionally, the tenor and trajectory of the Company's rental
income is measured:
WAULT WAULT to WAULT to Gross Gross reversionary
to next lease end next rent Yield yield (5)
break reversion at fair
date value(5)
31 December
2020 4.1 years 7.2 years 2.1 years 7.7% 8.7%
----------- ------------ ------------ ---------- -------------------
30 June 2021 4.6 years 7.8 years 2.0 years 7.6% 8.4%
----------- ------------ ------------ ---------- -------------------
Period change 0.5 years 0.6 years -0.1 years -0.1% -0.3%
----------- ------------ ------------ ---------- -------------------
Over the Period the Company increased the value of the Group's
revenue generating assets from EUR141.9 million to EUR165.8
million, while increasing the Company's contracted rent roll
from
EUR10.9 million as at 31 December 2020 to EUR12.8 million at 30
June 2021. The Company measures contracted rent roll in order to
demonstrate the progression of its primary source of income on a
monthly basis. The gross yield at fair value and gross reversionary
yield at fair value changed by less than 4% over the Period, the
majority of which was due to the increase in portfolio valuation
and property under development not being ascribed an ERV by the
external valuer, which will change when the development is
completed.
The Company also monitors the like-for-like property returns
(valuation change and revenue on properties owned throughout the
Period) to further analyse the performance of the property
portfolio value and revenue. While the Company remains acquisitive,
this does not reflect the performance of a significant number of
properties bought or sold in the Period. As time goes on it allows
the Company to review the relative contribution of each of these
sectors from a capital and revenue perspective.
Value change Revenue Value change
+ Revenue
H1 2021 2.4% 3.9% 6.3%
------------- -------- -------------
H1 2021 Office 2.0% 3.9% 5.9%
------------- -------- -------------
H1 2021 Industrial 3.9% 3.9% 7.8%
------------- -------- -------------
Value change Revenue Value change
+ Revenue
2020 2.5% 7.5% 10.0%
------------- -------- -------------
2020 Office 1.9% 7.4% 9.3%
------------- -------- -------------
2020 Industrial 5.5% 8.2% 13.7%
------------- -------- -------------
2019 5.4% 8.4% 13.8%
------------- -------- -------------
2019 Office 3.4% 8.2% 11.6%
------------- -------- -------------
2019 Industrial 15.7% 9.4% 25.1%
------------- -------- -------------
Financial Review
In a time of significant economic and social uncertainty and
disruption, our results for the Period were positive. Our shares in
issuance increased by 13.4 million (12.0%) and our property
portfolio by 18.4%. Group net assets grew from EUR111.6 million to
EUR125.7 million over the Period, annualised rental income grew
from EUR10.9 million to EUR12.8 million and administrative costs
were EUR2.5 million which included the one-off cost of listing on
the regulated market of Euronext Dublin, without which
administrative costs rose to EUR1.6 million from EUR1.4 million in
H1 2020, a move that reflects portfolio growth.
Net Asset Value
The net assets of the Group increased by EUR14.1 million, a rise
of 12.7% over the Period. The Company drew on its debt facility and
deployed equity raised in the Period on a further EUR19.0 million
of property assets. Valuation gains on the Group's portfolio over
the Period were EUR2.1 million, inclusive of property acquisition
costs of EUR1.7 million. The vast majority of the net rental income
was distributed to shareholders as quarterly property income
distributions.
Income statement
Net rental income for the Period was EUR5.7 million, with the
contracted rent roll rising by EUR1.9 million. The strong rental
collections of 2020 continued throughout the Period. A comparison
of contracted rent roll for properties owned on 31 December 2020
with 30 June 2021 shows an increase of 17.5%. Rent received on the
portfolio benefited from the letting of vacancy at Cork Airport
Business Park in January 2021 and the purchase of properties at
CityWest Business Park and Dundalk. As mentioned below in the
Portfolio Review, there were other lease events which increased the
income from some of the Company's properties, and with our
reversionary portfolio we expect further increases over the coming
years.
Administrative expenses over the Period were EUR2.5 million. The
principal increase from the prior Period was the cost of listing on
the regulated market of Euronext Dublin of EUR0.9 million. This was
a one off requirement of the Irish REIT legislation. If excluded,
administrative expenses would have increased by 16% from H1 2020
while the property portfolio increased by 19%. The Company
continues to review roles currently provided by third parties to
determine if in the future they could be done internally to provide
control and cost benefits.
Dividends
Dividends declared in the Period were 2.55 cents per share, an
increase of 0.10 cents per share on the dividends declared in the
first six months of 2020. While the costs of listing on the
regulated market of Euronext Dublin significantly reduced the
Company's EPRA earnings the Board declared a dividend that had
regard to EPRA earnings calculated on the basis of excluding the
majority of this exceptional cost. The Company has had a quarterly
dividend plan in place since March 2019 and continues to target
distributing its EPRA earnings to shareholders in this manner if
prudent and legally permissible.
Investment properties
The property portfolio value was EUR168.1 million at 30 June
2021, up from EUR141.9 million at 31 December 2020. Realised and
unrealised gains on the property portfolio were EUR2.1 million for
the year (notwithstanding the costs of property purchases). This
does not include the gain on sale of EUR0.3 million on two of the
non-Core properties, which completed in July 2021. Construction of
an extension to one of the Company's buildings at the IDA Business
and Technology Park, Athlone began, this is held in the Company's
newly established wholly owned subsidiary Yew Grove Holdco One
Limited. Capital expenditure not recharged to tenants was EUR0.1
million. As at 30 June 2021, the portfolio had 24 properties, with
an average value of EUR7.0 million. Following the July 2021 sales
of smaller properties, the Company has a single remaining legacy
property which is expected to be sold in H2 2021.
Capital
On 15 March 2021, the Company's shares were migrated from the
CREST system to the Euroclear Bank settlement system as was
required by the Migration of Participating Securities Act 2019. In
the following month, the Company issued 13.35 million shares at a
price of 95 cents per share for gross proceeds of EUR12.7 million,
which was deployed within six weeks in the purchase of additional
investment properties. Further drawings of EUR11.2 million were
made of the Company's revolving credit facility to complete these
purchases. In May at the EGM, the Company's shareholders approved a
100 million, one year share issuance program and the Company's
shares were moved from the Euronext Growth market of Euronext
Dublin to the regulated market of Euronext Dublin as required by
section 705B(1)(a)(iii) of the Taxes Consolidation Act 1997 to
maintain the REIT's tax status.
Liquidity
The Group has maintained strong reserves throughout the Period ,
finishing the Period with cash of
EUR11.3 million and EUR3.8 million of available debt facilities.
As at 30 June 2021, the Company LTV (as calculated under the REIT
Rules) was 29.6% having increased from 27.2% over the Period. The
Company remained fully compliant with its facility covenants
throughout the Period.
Portfolio Review
Portfolio performance:
The Company's property portfolio on 30 June 2021 had both Core
and non-Core assets. Non-Core assets are the three properties
available for sale in the attached financial statements: Old Mill
Lane and Canal House (both sold July 2021) and the Bridge Centre
(sale contract exchanged at Period end). Core assets are the
remainder of the property portfolio.
31 Dec 2020 30 Jun 2021 30 Jun 2021
(Core and non-Core assets) (Core and non-Core assets) (Core assets)
Contracted rent roll EUR10.9m EUR12.8m EUR12.3m
---------------------------- ---------------------------- ---------------
Portfolio ERV EUR12.4m EUR14.2m EUR13.8m
---------------------------- ---------------------------- ---------------
Portfolio value EUR141.9m EUR168.1m EUR163.9m
---------------------------- ---------------------------- ---------------
Gross yield at fair value 7.7% 7.6% 7.5%
---------------------------- ---------------------------- ---------------
Gross reversionary yield 8.7% 8.4% 8.4%
---------------------------- ---------------------------- ---------------
Number of properties 22 (7) 24 21
---------------------------- ---------------------------- ---------------
WAULT to Break / Lease End 4.1/7.2 years 4.6/7.8 years 4.5/7.9 years
---------------------------- ---------------------------- ---------------
Vacancy by ERV 6.9% 4.7% 4.9%
---------------------------- ---------------------------- ---------------
-- Two offices and one industrial building were purchased
at a purchase price of EUR19.0m in H1 2021
-- Portfolio characteristics by contracted rent roll:
o Location
-- 53% (Core 55%) (31 December 2020: 53%) of contracted
rent roll generated by buildings within the Dublin
catchment area.
o Sector
-- 75% (Core 78%) (31 December 2020: 76%) of contracted
rent roll from offices, 21% (Core 22%) (31 December
2020: 19%) from industrial and 4% (Core 0%) (31 December
2020: 5%) from mixed use and retail properties.
o Tenant type
-- 96% (Core 97%) (31 December 2020: 96%) of contracted
rent roll secured by Government, FDI and Large Enterprise
tenants.
o Tenant Industry
-- 31% (Core 32%) (31 December 2020: 36%) Life Sciences,
22% (Core 20%) (31 December 2020: 26%) Government
and 18% (Core 19%) (31 December 2020: 17%) Finance
and Business Services.
Property Type Location Value Contracted Gross Reversionary Gross WAULT WAULT Portfolio
(EUR'000) Rent Yield Rent Reversionary to to Vacancy
Roll at Roll Yield lease lease
(EUR'000) Fair (EUR'000) break end
Value (years) (years)
Suburban
1 One Gateway Office Dublin 19,350 1,170 6.0% 1,502 7.8% 1.3 2.4 11.6%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Three Suburban
2 Gateway Office Dublin 15,750 913 5.8% 1,185 7.5% 5.5 5.5 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
North
3 Letterkenny Office West 15,590 1,437 9.2% 1,458 9.4% 6.8 6.8 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
IDA Athlone
Unit B
4 & B2 Industrial Midlands 11,785 1,013 8.6% 1,013 8.6% 1.9 12.4 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
5 Teleflex Office Midlands 11,550 948 8.2% 851 7.4% 7.3 10.2 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Citywest
Blocks Suburban
6 E&F Office Dublin 11,390 984 8.6% 1,054 9.3% 3.9 6.3 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Ashtown
Gate Blocks Suburban
7 B&C Office Dublin 10,100 800 7.9% 777 7.7% 4.6 6.2 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Birch House Suburban
8 MP Office Dublin 8,700 697 8.0% 697 8.0% 9.0 14.0 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Tanola
House North
9 Dundalk Industrial East 8,200 601 7.3% 627 7.6% 8.3 18.3 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Unit 2600,
Cork
10 Airport Office Cork 7,275 350 4.8% 689 9.5% 4.5 14.5 49.2%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Airways Suburban
11 Units 7&8 Industrial Dublin 6,755 320 4.7% 594 8.8% 4.3 9.3 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Chestnut Suburban
12 House MP Office Dublin 6,200 577 9.3% 571 9.2% 2.5 2.5 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
IDA Athlone
13 Block C Industrial Midlands 3,255 280 8.6% 253 7.8% 3.3 8.3 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Block C
13b Extension Industrial Midlands 2,250 0 0.0% 0 0.0% 0.0 0.0 n/a
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
IDA
Waterford South
14 Block A Office East 4,150 353 8.5% 424 10.2% 2.1 13.5 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
IDA Athlone
15 Block A Industrial Midlands 3,700 270 7.3% 313 8.5% 4.4 7.5 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Hazel House Suburban
16 MP Office Dublin 3,485 331 9.5% 341 9.8% 1.0 2.7 1.5%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Willow Suburban
17 House MP Office Dublin 3,380 261 7.7% 315 9.3% 3.7 4.6 16.6%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Ash House Suburban
18 MP Office Dublin 3,300 326 9.9% 331 10.0% 5.0 5.0 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Blackwater
19 House Office Cork 2,920 246 8.4% 352 12.1% 3.7 3.7 28.2%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Unit L2 Suburban
20 Toughers Industrial Dublin 2,625 170 6.5% 253 9.6% 1.6 1.6 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Beech House Suburban
21 MP Office Dublin 2,235 229 10.3% 225 10.1% 1.8 5.7 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Core
Subtotal 163,945 12,275 7.5% 13,825 8.4% 4.5 7.9 4.9%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Old Mill Mixed South
22* Lane Use West 1,690 247 14.6% 162 9.6% 5.2 7.5 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Bridge
23 Centre Retail Midlands 1,530 209 13.7% 161 10.5% 7.3 7.9 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Mixed
24* Canal House Use Midlands 920 107 11.6% 55 6.0% 5.5 5.5 0.0%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
Total 168,085 12,837 7.6% 14,202 8.4% 4.6 7.8 4.7%
------------ ----------- --------- ---------- ----------- ------ ------------- ------------- -------- -------- ----------
(7) As of 1 January 2021, (i) Unit B and Unit B2 IDA Athlone,
(ii) Unit 7 Airways and Unit 8 Airways, and (iii) Block B and Block
C Ashtown Gate, have been re-categorised as three respective
properties (previously categorised as six properties). The number
of properties as at 31 December 2020 prior to the re-categorisation
was twenty-five (as disclosed in the 2020 Annual Report).
* Canal House and Old Mill Lane's March 2021 external valuations
are shown, both assets were sold in July 2021.
As at 30 June 2021, the Company's portfolio had twenty-four(7)
investment properties geographically spread throughout Ireland. The
value of the portfolio was EUR168.1 million (independently valued
by Lisney Limited), reflecting a yield to the Company of 7.6% and a
gross reversionary yield of 8.4%. The twenty-one Core assets were
valued at EUR163.9m, reflecting a yield to the Company of 7.5% and
a gross reversionary yield of 8.4%.
Core Portfolio Characteristics by Floor Area
The Core portfolio consists of 918,411 sq. ft. (85,323 sq. m) of
commercial properties. The office sector represents 60% of the Core
portfolio (548,904 sq. ft. / 50,994 sq. m), of which circa 34%
(315,045 sq. ft. / 29,268 sq. m) is in the Dublin catchment
area.
The industrial sector represents 40% of the Core portfolio
(369,507 sq. ft / 34,328 sq. m) of which circa 33% (121,686 sq. ft
/ 11,305 sq. m) is located within the Dublin catchment area. The
greatest concentration of our industrial space is at the IDA
Business & Technology Park, Athlone (161,370 sq. ft. / 14,991
sq. m) and the balance is located at the newly acquired Tanola
House in Dundalk (86,451 sq. ft. / 8,031 sq. m), Units 7 and 8
Airways (87,963 sq.ft / 8,172 sq. m) and Unit L2 Toughers Business
Park, Naas (33,723 sq. ft / 3,132 sq. m).
Overall, the vacancy rate of the Core portfolio by area
currently stands at 4.2% or 38,199 sq. ft. (3,548 sq. m) primarily
arising from available space at Unit 2600 at Cork Airport and
Blackwater House.
Investment Activity in H1 2021
The COVID-19 pandemic and national lockdowns continue to have a
major impact on the Company's investment activity. However, the
Company completed two acquisitions: the purchase of Tanola House in
Dundalk and Blocks E&F at Citywest, Dublin 24. The Company
commissioned the build of a c.37,000 sq. ft. (3,437 sq. m)
extension to Unit C, Athlone IDA Business and Technology Park. The
Company sold two of its non-Core assets at Listowel and
Portarlington, both sales were agreed in H1 2021 and completed in
early July 2021. The Company has also exchanged contracts to sell
its remaining non-Core asset, the Bridge Centre in Tullamore. It is
hoped that this deal will be completed at the end of H2 2021.
Unit C Building Extension, Athlone IDA Business & Technology
Park
In February, the Company agreed to finance the construction of a
new life science extension to one of its properties (Unit C) on the
IDA Ireland Business and Technology Park in Athlone.
T he extension is being constructed by JJ Rhatigan for a fixed
cost of c. EUR9.3 million on the Company's land. It has been
designed in conjunction with the tenant of Unit C (a multinational
in the life science sector), to accommodate the expansion of its
business. On practical completion of the building (estimated
February 2022) the tenant's lease for the extension will improve
the portfolio weighted average lease to break, as well as increase
the yield on the Company's portfolio.
Tanola House, Dundalk
In May 2021, the Company purchased Tanola House a recently
constructed high bay industrial unit of 86,451 sq. ft. (8,031 sq.
m) over two adjoining blocks on Coes Road, Dundalk. The building,
which has a 12.5m eaves height and 120 surface car parking spaces,
is tenanted by a US multinational. Their two leases have a weighted
average unexpired lease term ("WAULT") to first break of
approximately 8.3 years and 18.3 years to expiry. Tanola House was
acquired for EUR8.0 million, has a current annual rent of
EUR601,000, stepping up to EUR631,000 in approximately four years'
time, and represents a net initial yield of 6.9%, increasing to
7.3% at the rent step date.
Block E&F, Citywest, Dublin 24
In June, the Company completed the purchase of Blocks E&F,
Citywest, Dublin 24, for EUR11.0 million. It consists of two
detached office blocks of 45,972 sq. ft. (4,270 sq. m) and 165
surface car parking spaces. The buildings are fully tenanted by
three multinational tenants paying a current annual rent of
EUR984,000. This represents a net initial yield of 8.2% with a
potential reversionary yield of 9.2%. At purchase, the property had
a WAULT of 4.0 years to first break and 6.4 years to expiry.
Non-Core Asset Disposals
Old Mill Lane, Listowel and Canal House, Portarlington.
In June 2021, the Company exchanged contracts to sell two of its
non-Core properties: in Listowel for EUR1.9m (EUR260,000 more than
December 2020 valuation), and in Portarlington for EUR1.0m
(EUR80,000 more than December 2020 valuation). Both sales completed
subsequent to Period end in early July.
Additionally, the Company has agreed to sell its remaining
non-Core asset at The Bridge Centre, Tullamore which is expected to
complete in 2021. On completion the Company will have sold all its
retail properties and have reduced its exposure to SME risk
substantially.
Portfolio Asset Management
New Leases
In Gateway Three, the ESB agreed to regear their lease which was
due to expire in December 2021. They occupy the entire building of
43,212 sq. ft (4,014 sq. m) and 30 basement car parking spaces, and
have committed to a further five-year term from 1 January 2022 at
EUR29.00 psf with an option to extend for a further 12 months to
the end of 2027.
In addition to the ESB lease, the Company agreed two new office
leases in Millennium Park and Blackwater House. A new ten-year
lease with a Government body at The Bridge Centre helped the
proposed sale of this remaining non-Core asset.
Rent Reviews
F our rent reviews were completed during the first half of 2021,
three at Millennium Park and another at Blackwater House. All these
reviews increased the prior rent continuing to drive the ERVs of
these locations.
Break Options
A break option was exercised at Gateway One by Whirlpool, who
vacated their second floor space in June 2021, remaining in
occupation of their ground and first floor demise. They have two
years to their next break on this remaining space (c. 4.8 years to
expiry).
Two possible break options were not exercised at Millennium Park
and Ashtown Gate (by the OPW, a government tenancy). The OPW agreed
to remove a separate future break option in Ashtown Gate, so their
term there now extends to 2027 and 2032 in Blocks B and C
respectfully.
The Company will continue to actively asset manage the portfolio
throughout the second half of the year and beyond.
Environment and Sustainability
The building and construction sector is one of the biggest
producers of carbon emissions. Combined, buildings and construction
are responsible for 39% of all carbon emissions globally, with
operational emissions (from energy used to heat, cool and light
buildings) accounting for 28% (Source: World Green Building
Council).
The Climate Action and Low Carbon Development (Amendment) Act
2021 (the "Climate Action Act") was signed into law on 23 July 2021
and comes into operation by way of Ministerial commencement
order(s) as provided for in section 1 of the Climate Action Act.
The Climate Action Act significantly strengthen the framework for
governance of climate action by the Irish State to realise
Ireland's climate goals and obligations, with the objective of
pursuing the transition to a climate neutral, resilient and
biodiverse economy by no later than the end of 2050.
The Climate Action Act commits the Irish State to:
-- Set carbon budgets consistent with the Paris and other
international agreements and that provide a 51% reduction
in greenhouse gas emissions by 2030.
-- Have regard to key principles such as just transition
(the transfer of an extractive economy to a regenerative
economy), climate justice and protection and restoration
of biodiversity when preparing plans and frameworks.
-- Include public participation provisions that will require
public consultation and involvement on relevant climate
plans, strategies, and carbon budgets.
Given the importance of the property and construction sector in
creating emissions, this will create pressures to improve
emissions, both in construction and building use, within this
decade and will increase the importance of ESG initiatives.
Two examples of projects are included below to illustrate
energy/waste measurement and use, as well as improving the physical
environment of these buildings.
Energy Consumption
The Company intends to improve energy use at all of its
buildings where possible to do so. Given the structure of the
Company's leases (predominantly full repairing and insuring (" FRI
") leases), the Company's ability to make improvements and carry
out those necessary works is only directly within its control at
lease end for single tenanted buildings or in multi-tenanted
buildings where the Company, as landlord, is responsible for common
areas. Notwithstanding, most of our tenants are willing to engage
in initiatives aimed at reducing carbon emissions which will enable
the Company and its tenants to work together during the letting
cycle to improve energy measurement and reduce usage and
emissions.
Following installation of building management systems in One
Gateway, IDA Waterford Block A and Unit 2600 Cork Airport, the
Company took initial readings of energy and waste use in early 2020
. As a result of Covid-19, it remains a challenge to obtain
appropriate comparable measurements for 2021 since many of our
tenants did not occupy their buildings for most of the Period .
However, we were able to derive some useful information and, as and
when tenants return to work, the 2022 measurements will provide
more appropriate comparisons .
For example, the energy and waste use, cost, and emissions at
One Gateway from January to February 2020 was compared with the
same period in 2021:
-- Gas consumption was reduced as heating systems were switched
off for most of the day during the 2021 period.
-- Electricity consumption was split with a 53% reduction
in daytime use but only a 10% reduction in night-time
use as night lighting, security lighting and other critical
services such as IT remain operational then.
-- The reduced power use led to reductions of 93% in gas
and 18% in electricity costs.
-- The electricity charges did not match the drop in consumption
because transmission and distribution charges (incurred
regardless of consumption) make up around 50% of the overall
electricity cost.
Building and environmental improvement - Millennium Park
When the Millennium Park buildings in Naas were developed in
2006, the developer's requirement was for a range of office
buildings that would blend comfortably within the natural
surroundings. This was achieved through low building heights, the
use of raw materials which are neutral and fit better into a
natural environment, making these buildings sit comfortably within
the surrounding area. Since purchase in February 2020, the Company
has used biophilic design to make the common areas of the six
Millennium Park buildings welcoming spaces. Biophilic design aims
to connect buildings with natural surroundings through direct and
indirect use of natural materials. This is achieved by using timber
and organic materials, green natural features, and sympathetic
metal accents.
To improve this at Millennium Park we are:
-- I mproving access by providing external lighting and planters
along each of our building side entrances and stairwells
to encourage occupiers to walk upstairs rather than use
the building lifts.
-- Retrofitting LED lighting to external estate car parking
lights.
-- Installing bike racks outside the front of the buildings
to encourage occupiers to cycle to work.
-- Providing recycled picnic tables in the common green areas
within the estate.
-- Establishing a greenfield walking route around the business
park for pedestrians and runners.
-- All ocating biodiversity areas on the estate which will
be managed and cultivated.
The energy efficiency of each of the Millennium Park buildings
is being reviewed to determine medium term projects in conjunction
with tenants. We are implementing measures to improve water and
energy use such as:
1. Passive infrared ("PIR") sensors in toilets for immediate saving on water consumption.
2. PIR sensors for lights in stairwells, lobbies and toilets in common areas.
3. LED lights for stairwells lobby and toilets in common areas.
During the Period, the Company launched its first Honey Bee
project to help reverse the decline of Ireland's native honey bee.
Two beehives were installed on the six acre greenfield site located
in Millennium Park, Naas, which will be allowed to mature into a
meadow that will support pollination. The beehives are managed by
Bee Green Ireland, who will undertake regular inspections of the
hives to monitor the health of the bee colonies. We hope to
identify further sites that will be suitable to house more beehives
within our portfolio over the next few months.
Principal Risks and Uncertainties
The Company's Board has overall responsibility for the
establishment and oversight of the Company's risk management
framework to ensure that its strategy can be successfully
implemented. The Audit Committee is responsible for developing and
monitoring the Company's risk management policies. Risk management
policies are established to identify and analyse the risks and
emerging risks faced by the Company, to set appropriate risk limits
and controls and to monitor risks and adherence to limits. All of
these policies are regularly reviewed in order to reflect changes
in market conditions and the Company's activities.
The Company's risk register, reviewed by the Audit Committee,
records key risks and emerging risks across the Company's current
and future investment, operations, information technology,
governance, economic and strategic areas of activity. Emerging
risks have been indicated with * in the tables below. The register
records an assessment of the likelihood and impact of risks as well
as their direction in order to monitor progress in managing and
mitigating them. A register of material errors and breaches is also
maintained and no material breaches were noted during the
Period.
The Company's assets are primarily office and industrial
commercial properties in Ireland. The principal risks it therefore
faces are related to the Irish commercial property market in
general, the Company's operating environment and individual
properties and tenants. The Board has carried out a robust
assessment of the principal risks and concluded that the principal
risks and uncertainties that the Company is exposed to and that may
impact performance in the coming six month period are
substitutionally unchanged since the release of the Annual Report
and Financial Statements for the financial year ending 31 December
2020 ("The Annual Report") . The Company proactively identifies,
assesses, monitors and manages these risks , those that are
expected to be a key focus for the Company over the next six months
are indicated with a * below . Some risks are not yet known and
some that are not currently deemed material may turn out to be
material in the future. The material risks and uncertainties
identified, along with their strategic impact on the business and
mitigating factors, are summarised below, with updates where
relevant .
Strategic Risks
Listed in the Annual Report as Inappropriate Strategy*,
Reputational damage, Inappropriate capital structure, Inability to
grow the Company*, Reliance on incorrect information and
analysis.
These risks remain broadly unchanged. Over the reporting period
there has been little change to tenant working practices (which are
monitored as an indicator of future tenant office requirements),
and as more employees are expected to return to their offices over
the second half of the year the Company will continue to monitor
this closely. The Company has continued to reduce vacancy in its
office portfolio over the period and a number of tenants have
extended their leases beyond breaks in the year to date. The
Company demonstrated its ability to raise equity capital for growth
in the first half of the year and as the Company is keen to grow
the Board continue to review demand for further share issuance.
However, following the move to the regulated market of Euronext
Dublin the process of significant share issuance will be slower and
more expensive should a prospectus be required, therefore the risk
of Inability to grow the Company has been changed from Stable to
Increasing.
Economic Risks
Listed in the Annual Report as Weakening Economy, Weak FDI
demand* and Interest rates.
The principal of these risks over the next six months is FDI
demand. The majority of the Company's tenants by rent roll are FDI
tenants, and while IDA Ireland's news of FDI growth in H1 2021 is
generally positive, the Company will focus on the potential impact
of higher Irish corporation tax rates on current and prospective
FDI tenants in the second half of 2021, as this risk has moved from
Stable to Increasing. The Company has the ability to implement
interest risk rate hedging strategies should they be required.
Regulatory Risks
Listed in the Annual Report as Brexit, Taxation management and
reform*, Taxation planning.
The Company has continued to manage its taxation planning risk
by listing its shares on the regulated market of Euronext Dublin to
comply with the Revenue's requirements of a REIT within its initial
three years. The Company's shares were migrated from CREST to
Euroclear Bank as required following Brexit, and the Board
continues to review the impact of Brexit on its tenants and
business. The possibility of taxation reform following OECD
agreement to raise the minimum corporation tax of its member
nations may affect the future attractiveness of Ireland for FDI
tenants, which has lead to Taxation management and reform risk
being moved from Stable to Increasing.
Property
Listed in the Annual Report as Company Asset Valuation, Property
concentration, Tenant behaviour patterns, Tenant property use*,
Poor execution of development or refurbishment projects,
Ineffective asset management.
These risks remain broadly unchanged, in part due to the
continued impact of the Covid-19 pandemic and little change in
tenant working patterns over the first half of 2021. Should a more
widespread tenant return to the Company's offices occur during the
second half of the year this may change. Tenant collections have
remained high. The Company has started its first development
project which will continue throughout the next six months, this is
currently progressing in a timely manner and within budget and is
expected to complete in early 2022.
Operational
Listed in the Annual Report as Loss of key staff, Business
interruption, Cyber-attack.
Again these remain broadly unchanged. The Company has increased
the security of its principal IT systems and all employees have
undergone IT security training. There has been no staff turnover,
and the 2021 LTIP grant was extended to further employees to
enhance employee retention.
Environmental
Listed in the Annual Report as Sustainability, Climate
change*.
These risks are unchanged from the Annual Report, however
increased investor and market interest in the role of corporations
in mitigating further climate change has led to this risk being a
priority focus for the Board. The Company's ESG roadshow in
February 2021 demonstrated investor interest in the Company's
sustainability plans and these remain a key focus for the
Company.
Directors' Responsibilities Statement
The Directors are responsible for preparing the Interim report
and condensed consolidated financial statements in accordance with
IAS 34 Interim Financial Reporting as issued by the IASB and
adopted by the EU; the Transparency (Directive 2004/109/EC)
Regulations 2007 and the Central Bank (Investment Market Conduct)
Rules 2019.
Each of the Directors, whose names appear in this Interim report
and condensed consolidated financial statements, confirms that, to
the best of his/her knowledge, the condensed consolidated financial
statements in the Interim report and condensed consolidated
financial statements have been prepared in accordance with
International Accounting Standard 34 Interim Financial Reporting as
adopted by the European Union ("EU") and the half yearly management
report 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 and their impact on the
Interim report and condensed consolidated financial statements, 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:
- a fair review of related party transactions that have taken
place during the Period and that have materially affected the
financial position or performance of the Group during the Period;
and
- any changes in the related parties' transactions described in
the 2020 Annual Report that could have a material impact on the
financial position or performance of the Group in the first six
months of the financial year.
Signed on behalf of the Board
________________ _________________
Charles Peach Jonathan Laredo
Chief Financial Officer Chief Executive Officer
26 August 2021
INDEPENT REVIEW REPORT TO YEW GROVE REIT Plc
We have been engaged by Yew Grove REIT plc ("the company") to
review the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2021 which
comprises of the condensed consolidated income statement, condensed
consolidated statement of financial position as at 30 June 2021,
condensed consolidated statement of changes in equity, condensed
consolidated statement of cash flows, and the related notes 1 to
24. 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 condensed set of financial statements.
This report is made solely to the company pursuant to
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council ("ISRE 2410"). 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 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 in accordance with
International Accounting Standard 34 as adopted by the European
Union, the Transparency (Directive 2004/109/EC) Regulations 2007
and the Central Bank (Investment Market Conduct) Rules 2019.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly 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 condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review pursuant to 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 condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2021 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union, the Transparency (Directive 2004/109/EC)
Regulations 2007 and the Central Bank (Investment Market Conduct)
Rules 2019.
Matt Foley
For and on behalf of Deloitte Ireland LLP,
Chartered Accountants and Statutory Audit Firm
Deloitte & Touché House, Earlsfort Terrace, Dublin 2
Condensed Consolidated Statement of Comprehensive Income
For the six months period to 30 June 2021
Six months Six months
ended ended
30 June 30 June
2021 2020
Notes (unaudited) (unaudited)
EUR EUR
Total Rental and related income
Rental income 3 6,047,256 5,610,155
Property expenses 4 (378,592) (330,342)
------------- -------------------
Net Rental and related income 5,668,664 5,279,813
Fair value gains/(loss) on
investment properties 5 2,143,303 (1,768,330)
-------------
Total income after revaluation
gains and losses 7,811,967 3,511,483
Operating expenses
AIFM fees 6 (37,500) (37,500)
Finance costs 7 (569,355) (670,522)
Expected credit losses on financial
assets 12 (13,126) (85,879)
Exceptional item - main market
listing expense 8 (900,000) -
Administration expenses 8 (1,631,696) (1,404,330)
------------- -------------------
Total Operating expenses (3,151,677) (2,198,231)
Profit before taxation 4,660,290 1,313,252
Income tax - -
Profit for the period 4,660,290 1,313,252
-------------
Total comprehensive income
for the period attributable
to the owners of the Group 4,660,290 1,313,252
============= ===================
Basic earnings per share (cents) 9 3.99 1.18
Basic earnings per share (cents)
before exceptional item 9 4.76 1.18
Diluted earnings per share (cents) 9 3.97 1.17
Diluted earnings per share (cents)
before exceptional item 9 4.74 1.17
EPRA earnings per share (cents) 9 2.15 2.76
EPRA earnings per share (cents) before
exceptional item 9 2.92 2.76
Diluted EPRA earnings per share (cents) 9 2.14 2.76
Diluted EPRA earnings per share (cents)
before exceptional item 9 2.91 2.76
Condensed Consolidated Statement of Financial Position
As at 30 June 2021
As at As at
30 June 2021 31 December
2020
(unaudited) (audited)
Notes EUR EUR
Non-current assets
Investment properties 10 163,945,000 141,925,000
Property, plant & equipment 11 199,495 239,416
Interest in joint venture 3,473 3,473
Trade and other receivables 12 1,189,571 793,333
------------- -------------
165,337,539 142,961,222
Current assets
Trade and other receivables 12 1,568,573 1,076,579
Cash and cash equivalents 13 11,268,916 10,721,464
------------- -------------
Current assets 12,837,489 11,798,043
Investment properties held
for sale 10 4,140,000 -
Total assets 182,315,028 154,759,265
Current liabilities
Trade and other payables 14 (6,964,991) (4,724,215)
Non-current liabilities
Trade and other payables 14 (115,035) (153,379)
Borrowings 15 (49,514,571) (38,278,594)
Total liabilities (56,594,597) (43,156,188)
------------- -------------
Net assets 125,720,431 111,603,077
============= =============
Equity
Share capital 17 1,249,222 1,115,722
Share premium 51,958,322 39,409,322
Other reserves 377,820 293,627
Retained earnings 72,135,067 70,784,406
------------- -------------
Total equity 125,720,431 111,603,077
============= =============
IFRS NAV per ordinary share
(cents) 16 100.64 100.03
Diluted IFRS NAV per ordinary
share (cents) 16 100.34 99.77
EPRA NTA per ordinary share
(cents) 16 100.34 99.77
Condensed Consolidated Statement of Changes in Equity
For the six months period to 30 June 2021
Share capital Share premium Retained earnings Total
account (unaudited) (unaudited) Other reserve equity
(unaudited) (unaudited) (unaudited)
---------------------
EUR EUR EUR EUR EUR
--------------------- ---------------- ------------------- ------------------- --------------- --------------
As at 1 January
2021 1,115,722 39,409,322 70,784,406 293,627 111,603,077
Total comprehensive
income for the
period: - - 4,660,290 - 4,660,290
Transactions with
owners
recognised in
equity:
Shares issued
in the period
(Note 17) 133,500 12,549,000 - - 12,682,500
Share issue cost - - (352,965) (352,965)
Share based payments
expense (Note
21) - - - 84,193 84,193
Equity Dividends
paid (Note 19) - - (2,956,664) - (2,956,664)
---------------- ------------------- ------------------- --------------- --------------
As at 30 June
2021 1,249,222 51,958,322 72,135,067 377,820 125,720,431
================ =================== =================== =============== ==============
For the six months period to 30 June 2020
Share capital Share premium Retained earnings Total
account (unaudited) (unaudited) Other reserve equity
(unaudited) (unaudited) (unaudited)
---------------------
EUR EUR EUR EUR EUR
--------------------- ---------------- ------------------- ------------------- --------------- --------------
As at 1 January
2020 1,115,722 39,409,322 69,272,275 125,222 109,922,541
Total comprehensive
income for the
period: - - 1,313,252 - 1,313,252
Transactions with
owners
recognised in
equity:
Final liquidation
of fund - - (151,633) - (151,633)
Share based payments
expense (Note
21) - - - 75,024 75,024
Equity Dividends
paid (Note 19) - - (2,499,218) - (2,499,218)
---------------- ------------------- ------------------- --------------- --------------
As at 30 June
2020 1,115,722 39,409,322 67,934,676 200,246 108,659,966
================ =================== =================== =============== ==============
Unaudited Condensed Consolidated Statement of Cash Flows
For the six months period to 30 June 2021
Six months Six months
ended 30 June ended 30 June
2021 2020
(Unaudited) (Unaudited)
Notes
EUR EUR
Cash flows from operating activities
Profit before taxation 4,660,290 1,313,252
Adjustments for:
Depreciation 11 39,922 1,068
Fair value (gains)/ losses on
investment properties 5 (2,143,303) 1,768,330
Finance costs 7 569,355 670,522
Equity settled share based payments
expense 21 84,193 75,024
--------------- -------------------
3,210,457 3,828,196
Changes in:
Decrease/(Increase) in trade
and other receivables (2,460,927) (259,440)
Increase/(Decrease) in trade
and other payables 1,936,627 (878,172)
Cash generated from operating
activities 2,686,157 2,690,582
Interest paid 14/15 (528,778) (270,397)
--------------- -------------------
Net cash inflow from operating
activities 2,157,379 2,420,185
Cash flows from investing activities
Purchase of investment properties 10 (20,654,265) (24,853,330)
Development (1,786,088) -
Deposit received for sale of
investment property 10 295,000 -
Purchase of computer equipment - (998)
Distribution from fund - 280,236
--------------- -------------------
Net cash outflow from investing
activities (22,145,353) (24,574,092)
Cash flows from financing activities
Issue of ordinary share capital 17 12,682,500 -
Issue costs (352,965) -
Repayment of principal portion
of lease liability 11 (37,445) -
Proceeds from loans and borrowings 15 11,200,000 19,564,460
Equity Dividend Paid 19 (2,956,664) (2,499,218)
--------------- -------------------
Net cash inflow from financing
activities 20,535,426 17,065,242
Net increase/(decrease) in cash
and cash equivalents 547,452 (5,088,665)
Cash and cash equivalents at
the beginning of the period 13 10,721,464 14,577,461
--------------- -------------------
Cash and cash equivalents at
the end of the period 13 11,268,916 9,488,796
=============== ===============
Notes to the Unaudited Condensed Consolidated Financial
Statements
1. Accounting policies
1.1 General information
Yew Grove REIT plc (the "Company"), with registered number
623896, together with entities controlled by the Company (its
subsidiaries) (together the "Group"), is engaged in investing in a
diversified portfolio of Irish commercial property with a view to
maximising its shareholder returns.
The Company is a public limited company, incorporated and
domiciled in Ireland. The registered address of the Company is
1(st) Floor, 57 Fitzwilliam Square, Dublin 2.
The ordinary shares of the Company were admitted to trading on
the Euronext Growth Market (formerly the Enterprise Securities
Market) of Euronext Dublin and the Alternative Investment Market of
the London Stock Exchange on 8 June 2018. On 28 May 2021 the entire
issued ordinary share capital of Yew Grove (the "Ordinary Shares")
was admitted to the primary listing segment of the Official List of
Euronext Dublin and to trading on the regulated market of Euronext
Dublin (the "Main Market"). The Company has retained its listing on
the AIM market of the London Stock Exchange.
1.2 Trading period
The Unaudited Condensed Consolidated Financial Statements herein
are for the six months period to 30 June 2021.
The results are inclusive of the parent company (Yew Grove REIT
plc), its subsidiary companies and its joint venture (Note 20) for
the six months period to 30 June 2021.
1.3 Going concern
Based on financial projections which extend beyond twelve months
from the date of the approval of these financial statements, the
Directors consider that the Company and Group has adequate
resources to continue in operational existence for the foreseeable
future. The Company has acknowledged the risk factors of the
current economic environment in the risks and uncertainty section
of this report. The Company has shown a market leading rent
collection rate of greater than 95% of rents due in 2020, this
continued into 2021 and is expected to remain at full or close to
full collection. The 30 June 2021 valuation has shown the Company's
property portfolio to be independently valued in excess of the
aggregate of the December 2020 valuation or if purchased since
then, the purchase price. The Company continues to be in compliance
with its debt finance facility covenants, has the ability to draw
further on the current facility and has cash on hand. For this
reason, the Directors have concluded that they should prepare the
unaudited condensed consolidated financial statements on a going
concern basis.
1.4 Basis of preparation
The Condensed Consolidated Financial Statements for the six
months period to 30 June 2021 have been prepared in accordance with
IAS 34 Interim Financial Reporting The Directors are responsible
for preparing the Interim report and condensed consolidated
financial statements in accordance with IAS 34 Interim Financial
Reporting as issued by the IASB and as adopted by the European
Union; the Transparency (Directive 2004/109/EC) Regulations 2007
and the Central Bank (Investment Market Conduct) Rules 2019.. The
Condensed Consolidated Financial Statements should be read in
conjunction with the Report and Consolidated Financial Statements
for the year ended 31 December 2020. The accounting policies,
significant judgements, key assumptions and estimates applied by
the Group in these Condensed Consolidated Financial Statements are
consistent with those applied in the Report and Consolidated
Financial Statements for the year ended 31 December 2020. They do
not include all disclosures that would otherwise be required in a
complete set of financial statements.
The information for the year ended 31 December 2020 does not
constitute statutory accounts as defined in the Companies Act 2014.
A copy of the statutory accounts for that year has been delivered
to the Registrar of Companies. The auditors reported on those
accounts: their report was unqualified and did not draw attention
to any matters by way of emphasis. The half yearly financial
statements herein are non-statutory financial statements for the
purposes of the Companies Act 2014.
A number of changes to IFRS became effective in 2021, however,
they did not have a material effect on the Condensed Consolidated
Interim Financial Statements included in this report. Additionally,
the Group presents its policy for non-current assets held for sale
for the first time below:
Non-current assets held for sale
Non-current assets classified as held for sale are measured at
the lower of carrying amount and fair value less costs to sell.
Non-current assets are classified as held for sale if their
carrying amount will be recovered through a sale transaction rather
than through continuing use. This condition is regarded as met only
when the sale is highly probable and the asset is available for
immediate sale in its present condition. Management must be
committed to the sale which should be expected to qualify for
recognition as a completed sale within one year from the date of
classification.
The interim figures for the period ended 30 June 2021 and the
comparative results for the period ended 30 June 2020 are unaudited
but have been reviewed by the independent auditor whose report is
set out in this report. The interim financial statements herein are
non-statutory financial statements for the purposes of the
Companies Act 2014 and are approved by the Directors on 26 August
2021 for issue.
The Condensed Consolidated Financial Statements are presented in
Euro, which is the Company's functional currency and the Group's
presentational currency.
2. Segment reporting
The Group is organised into two business segments, against which
the Group reports its segmental information. These are Office
Assets (including retail and mixed-use buildings) and Industrial
Assets. The non-Core assets which are held for sale are included
within Office Assets. All of the Group's operations are in the
Republic of Ireland. Operating segments are reported in a manner
consistent with the internal reporting provided to the chief
operating decision makers, who have been identified as the Board of
Directors of the Company.
Unallocated income and expenses are items incurred centrally
which are neither directly attributable nor reasonably allocable to
individual segments. Unallocated assets are cash and cash
equivalents, and certain other assets.
The Group's key measures of performance for a segment are net
rental income and the movement in fair value of properties, as
these measures illustrate and emphasize that segment's contribution
to the reported profits of the Group and the input of that segment
to earnings per share. By focusing on these prime performance
measures, other key statistical data such as capital expenditure
and one off exceptional items are separately highlighted for
analysis and attention.
Revenue as stated in the Condensed Consolidated Statement of
Comprehensive Income relates to rental income from its investment
in commercial properties held by the Group, license income from the
licensing of the Group's car park spaces and service charges
received by its subsidiary management companies.
Major Customers
Included in gross rental income are rents of EUR1.96m (H1 2020:
EUR1.40m) which arise from the Group's largest three (2020: two)
largest tenants, each of which contributed more than 10% of the
Group's revenue. No other single tenant contributed more than 10%
of the Group's revenue in 2021.
Unallocated Group Total
Office Industrial expenses
Assets Assets Total and assets
EUR EUR EUR EUR EUR
Period ended 30 June
2021
Rental and related income 4,937,662 1,080,998 6,018,660 28,596 6,047,256
Property expenses (378,180) (412) (378,592) - (378,592)
------------ ----------- ------------ ------------ ------------
Net rental income 4,559,482 1,080,586 5,640,068 28,596 5,668,664
Fair value gains on
investment properties 1,806,613 336,690 2,143,303 - 2,143,303
Expected credit loss
on financial assets (13,126) - (13,126) - (13,126)
Operating expenses - - - (3,138,551) (3,138,551)
Profit before tax 6,352,969 1,417,276 7,770,245 (3,109,955) 4,660,290
------------ ----------- ------------ ------------ ------------
As at 30 June 2021
------------ ----------- ------------ ------------ ------------
Investment properties 129,515,000 38,570,000 168,085,000 - 168,085,000
------------ ----------- ------------ ------------ ------------
Included in Office Assets are non-Core assets which are
classified as held-for-sale. The value of these assets is
EUR4,140,000. The rental income for held-for-sale assets for the 6
months to 30 June 2021 was EUR274,723 with property expenses of
EUR13,000.
Unallocated
Office Industrial expenses
Assets Assets Total and assets Group Total
EUR EUR EUR EUR EUR
Period ended 30 June
2020
Rental and related income 4,172,538 1,311,013 5,483,551 126,603 5,610,155
Property expenses (299,066) (8,326) (307,392) (22,950) (330,342)
-------------- ----------- -------------- -------------- ------------
Net rental income 3,873,472 1,302,687 5,176,159 103,653 5,279,812
Fair value (losses)
on investment properties (2,363,330) 595,000 (1,768,330) - (1,768,330)
Operating expenses - - - (2,198,230) (2,198,230)
Profit before tax 1,510,142 1,897,687 3,407,829 (2,094,578) 1,313,252
-------------- ----------- -------------- -------------- ------------
As at 30 June 2020
-------------- ----------- -------------- ----------------------------
Investment properties 113,460,000 27,615,000 141,075,000 - 141,075,000
-------------- ----------- -------------- -------------- ------------
3. Rental and related income
Six months Six months ended
ended 30 June 2020
30 June 2021 EUR
EUR
-------------------------- -------------- -----------------
Gross rental income 5,540,256 4,974,026
License income 163,901 151,483
Service charge income 314,503 180,904
Lease surrender premium - 148,361
Other income 28,596 155,381
-------------------------- -------------- -----------------
Net revenue 6,047,256 5,610,155
-------------------------- -------------- -----------------
Gross rental income represents amounts receivable from tenants
under leases associated with the Group's property business. Licence
income represents amounts under licences receivable from tenants
associated with the licensing of the Group's car park spaces.
Service charge income relates to contributions from tenants of the
Group's buildings for property expenses of the occupied buildings.
Service charge income receivable from tenants is recognised as
revenue in the period in which the related expenditure is
recognised.
In 2020, the Company agreed terms on the surrender of a lease at
its property at Holly Avenue, Stillorgan, Dublin for EUR426,603,
EUR126,603 for lease surrender and EUR300,000 for dilapidations
(note 5). The lease surrender was completed on 8 May 2020. An
additional surrender amount of EUR21,758 was received in 2020 from
a tenant who gave notice to exercise their lease break.
Other income in 2021 includes amounts relating to acquisitions,
other income in 2020 relates to the finalisation of the voluntary
liquidation of Yew Tree Investment Fund plc.
4. Property expenses
Six months Six months ended
ended 30 June 2020
30 June 2021 EUR
EUR
------------------------- -------------- -----------------
Service charge expenses 230,094 111,467
Direct property costs 135,498 205,875
Car park costs 13,000 13,000
------------------------- -------------- -----------------
Total 378,592 330,342
------------------------- -------------- -----------------
Property expenses include service charges and other costs
directly recoverable from tenants, and non-recoverable costs
directly attributable to the Group's properties. Service charge
expenses typically include security, insurance, maintenance, and
other costs of managing the buildings due from and recharged to
tenants. Direct property costs have fallen as vacancy has been
reduced in the portfolio.
5. Gains/(Losses) on investment properties
Six months Six months ended
ended 30 June 2020
30 June 2021 EUR
EUR
----------------------------------------- -------------- -----------------
Fair value gains/(losses) on investment
properties 2,143,303 (2,068,330)
Gain on lease surrender dilapidations - 300,000
----------------------------------------- -------------- -----------------
Total 2,143,303 (1,768,330)
----------------------------------------- -------------- -----------------
A valuation of the Group's properties as at 30 June 2021 was
completed by Lisney Limited ("Lisney") as external independent
Valuer. Lisney prepared the valuation on the basis of market value
in accordance with the Royal Institution of Chartered Surveyors
("RICS") Valuation - Global Standards (January 2020). Their
valuation was subsequently reviewed by the Valuation Committee and
is used unadjusted in these statements (Note 10).
During the prior period the Company agreed terms on the
surrender of a lease at its property Holly Avenue, Stillorgan,
Dublin and recognised a gain from the EUR300,000 dilapidations paid
under that lease surrender.
6. AIFM fees
Six months Six months
ended ended
30 June 2021 30 June 2020
EUR EUR
----------- -------------- --------------
AIFM fees 37,500 37,500
----------- -------------- ----------------
Total 37,500 37,500
----------- -------------- ----------------
The Company is required as a REIT to have an Alternative
Investment Fund Manager ("AIFM"). The Company has agreed with
Ballybunion Capital Limited, an AIFM authorised by the Central Bank
of Ireland, for it to act as the external AIFM of the Company,
subject to overall supervision of the AIFM by the Board. The fees
above are fees paid to the AIFM in accordance with the service
level agreement between the AIFM and the Company.
7. Finance costs
Six months Six months
ended ended
30 June 2021 30 June 2020
EUR EUR
---------------------------------------------------- --------------
Effective interest expense on borrowings 568,700 670,522
Lease interest expense 655 -
Total 569,355 670,522
------------------------------------------- -------- --------------
The effective interest expense on borrowings arises as a result
of the recognition of interest expense, commitment fees and
arrangement fees on borrowings using the effective interest rate
method. During December 2020, the previous facility was
extinguished and a new facility agreed. The amortisation of the
previous borrowing costs resulted in a higher expense recognition
in the six months to June 2020. The interest expense has increased
over the period due to further drawings on the facility, as at 30
June 2021 the borrowed balance was EUR49.5million versus
EUR38.3million in December 2020 (Note 15).
8. Administration expenses
Profit before tax for the period has been stated after
charging:
Six months Six months
ended ended 30 June
30 June 2021 2020
EUR EUR
-------------------------------------- --------------- ----------
Staff costs
Independent Non-executive Directors 850,772 745,310
(Note 21) 115,000 115,000
Property valuation fees 43,500 35,000
Property management fees 38,691 40,506
Legal and consultancy fees 276,509 161,566
Audit fees 37,500 37,500
Depositary fees 26,658 24,000
Information Technology 17,963 29,730
Depreciation 39,922 1,068
Other costs 185,181 214,650
--------------------------------------- --------------- ----------
Total 1,631,696 1,404,330
--------------------------------------- --------------- ----------
Staff costs represents total remuneration and other benefits
paid to all employees for the period. Further information on
Directors' remuneration can be found in note 21 to the Condensed
Consolidated Financial Statements.
Legal costs have increased due to the migration of the Company's
shares from CREST to Euroclear Bank, this one off expense was circa
EUR40,000. Other consultancy costs have increased due to increased
marketing and other similar costs incurred from third party
providers.
In September 2020 the Company took a lease on a new head office,
this was recognised as a right-of-use asset and is depreciated over
the life of the lease. Before September 2020 there was a short term
head office lease which was recognised as an expense. Other costs
include items such as the Company's general expenses, PR costs,
insurance, donations and non-recoverable VAT expenses.
Six months Six months
ended ended
30 June 2021 30 June 2020
EUR EUR
-------------------------- --------------
Exceptional item 900,000 -
------------------ ------- ----------------
Total 900,000 -
------------------ ------- ----------------
To maintain compliance with the REIT rules the company was
required to list its shares on an EU regulated main market within
three years of becoming a REIT. On 28 May 2021 the Company's entire
issued ordinary share capital (the "Ordinary Shares") was listed on
the primary listing segment of the Official List of Euronext Dublin
and admission to trading on the regulated market of Euronext Dublin
(the "Main Market") (together "Admission") took place.
Shortly before Admission trading of the Ordinary Shares on the
Euronext Growth market was cancelled. The Company retained its
listing on the AIM market of the London Stock Exchange throughout
the period.
The Company did not raise any funds or issue any new Ordinary
Shares in connection with Admission. No Ordinary Shares were
offered or marketed to the public in connection with Admission, or
the publication of the required Prospectus. Following Admission,
the Company's Ordinary Shares continue to be registered with their
existing ISIN number of IE00BDT5KP12 and the Company's stock code
continues to be "YEW" on Euronext Dublin and "YEW" on the AIM
Market of the London Stock Exchange. On Admission, there were
124,922,210 ordinary shares in issue.
The Prospectus for Admission was approved by the Central Bank of
Ireland and is available for inspection on the Company's website
(www.ygreit.com/prospectus/). Goodbody Stockbrokers UC acted as
Euronext Sponsor to the Company in connection with the Admission.
Costs included the Sponsors fees, CBI and Euronext fees, legal
costs, valuation, preparation and review of the prospectus and
printing. These are deemed one off costs to the Company and are not
expected to be reoccurring in nature.
9. Earnings per share
Six months ended Six months
WEIGHTED AVERAGE NUMBER OF SHARES 30 June 2021 ended 30 June
2020
--------------------------------------- ----------------- ---------------
Share in issue at period end 124,922,210 111,572,210
--------------------------------------- ----------------- ---------------
Weighted average number of shares 116,867,461 111,572,210
--------------------------------------- ----------------- ---------------
Number of shares to be issued
under share based payment - dilutive
effect 377,820 200,246
--------------------------------------- ----------------- ---------------
Diluted number of shares 117,245,281 111,772,456
--------------------------------------- ----------------- ---------------
Six months
ended Six months ended
BASIC AND DILUTED 30 June 2021 30 June 2021 Six months
EARNINGS PER SHARE Before exceptional After exceptional ended
item item 30 June 2020
EUR EUR EUR
-------------------------- -------------------- -------------------- ---------------
Profit for the period
attributable to the
owners of the Group 5,560,290 4,660,290 1,313,252
-------------------------- -------------------- -------------------- ---------------
Weighted average number
of ordinary shares
(basic) 116,867,461 116,867,461 111,572,210
Weighted average number
of ordinary shares
(diluted) 117,245,281 117,245,281 111,772,456
Basic earnings per
share (cents) 4.76 3.99 1.18
-------------------------- -------------------- -------------------- ---------------
Diluted earnings per
share (cents) 4.74 3.97 1.17
-------------------------- -------------------- -------------------- ---------------
Six months Six months ended
ended 30 June 2021
30 June 2021 After exceptional Six months
Before exceptional item ended 30 June
item 2020
EPRA EARNINGS PER EUR EUR EUR
SHARE
-------------------------- -------------------- ------------------- ----------------------------
Profit for the financial
period 5,560,290 4,660,290 1,313,252
adjusted for:
Change in fair value
of investment property (2,143,303) (2,143,303) 1,768,330
-------------------------- -------------------- ------------------- ----------------------------
Total EPRA earnings 3,416,987 2,516,987 3,081,582
-------------------------- -------------------- ------------------- ----------------------------
EPRA EPS (Basic) 2.92 2.15 2.76
EPRA EPS (Diluted) 2.91 2.15 2.76
-------------------------- -------------------- ------------------- ----------------------------
The basic total profit per ordinary share of 4.76 cents per
share is based on the earnings for the period of EUR5,560,290
(before the exceptional item) and on 116,867,461 ordinary shares,
being the time weighted average number of shares in issue during
the period calculated in accordance with IAS 33 Earnings Per Share.
The diluted earnings per share of 4.74 (before the exceptional
item) cents per share is based on the dilutive effect of the
outstanding share-based payments (Note 21). The basic total
earnings per ordinary share of 3.99 cents per share is based on the
earnings for the period of EUR4,660,290 (after the exceptional
item) and on 116,867,461 ordinary shares, being the time weighted
average number of shares in issue during the period. The diluted
earnings per share of 3.97 (after the exceptional item) cents per
share reflects the dilutive effect of the outstanding share-based
payments (Note 21).
In 2020 the basic total profit per ordinary share of 1.18 cents
per share was based on the earnings for the period of EUR1,313,252
and on 111,572,210 ordinary shares, being the time weighted average
number of shares in issue during the period. The diluted earnings
per share of 1.17 cents per share reflects the dilutive effect of
the outstanding share based payments (Note 21).
10. Investment properties
Movement for the six months to 30 June 2021:
Industrial Investment
property property
Investment under construction held for
property EUR sale Total
EUR EUR EUR
--------------------------------------------- --------------------- ------------- ------------
As at 1 January 2021 137,690,000 - 4,235,000 141,925,000
Property purchases 20,654,265 - - 20,654,265
Development expenditure 106,287 3,256,145 - 3,362,432
Gains/(Losses) on investment
properties 3,244,448 (1,006,145) (95,000) 2,143,303
-------------------------------- ------------ --------------------- ------------- --------------
Closing fair value 161,695,000 2,250,000 4,140,000 168,085,000
-------------------------------- ------------ --------------------- ------------- --------------
Movement for the six months to 30 June 2020:
Investment Industrial Investment
property property property
EUR under construction held for
EUR sale Total
EUR EUR
-------------------------------- ----------------------- ------------- -------------
As at 1 January 2020
Property purchases 115,790,000 - - 115,790,000
Disposal of property 27,353,330 - - 27,353,330
Development expenditure (2,205,000) - - (2,205,000)
Lease surrender dilapidations 120,607 - - 120,607
premium (300,000) - - (300,000)
Gain on investment properties 1,166,063 - - 1,166,063
--------------------------------- ------------------ --- ------------- ---------------
Closing fair value 141,925,000 - - 141,925,000
--------------------------------- ------------------ --- ------------- ---------------
During the six months to 30 June 2021 the Group acquired an
industrial building in Dundalk and two adjoining office properties
in Citywest Dublin. Tanola House, Dundalk was acquired for EUR8.7
million (vendor price EUR7,990,000 and transaction costs of
EUR717,165). Blocks E&F, Citywest Dublin were acquired for
EUR11.9 million (vendor price EUR11,000,000 and transaction costs
of EUR947,100).
The Group announced in the period that it had agreed to fund the
construction of a new industrial building adjacent to one of its
existing properties on the IDA Ireland Business and Technology Park
in Athlone. The new building, of approximately 37,000 sq feet, is
being constructed by JJ Rhatigan for an agreed cost of c.EUR9.3
million on land owned by Yew Grove adjacent to the one of the
Company's existing buildings. This new extension has been designed
in conjunction with the tenants of the existing building, a
multinational in the life science sector. On practical completion
of the building, which is expected to take approximately 12 months,
the lease will start to cashflow which will be additive to the
portfolio weighted average lease to break as well as accretive to
the net yield on Yew Grove's portfolio. The loss on industrial
property under construction is the difference between accrued costs
and the valuer's assessment of value at that date. The valuer's
assessment of the development's value reflects the as yet
uncompleted nature of the development.
At the period end the Group had exchanged contracts for the sale
of all three of its non-Core properties. A deposit of EUR295,000
was held against the sale of two of these properties as at 30 June
2021 and they subsequently completed in July (Note 22) and the
third is expected to complete in September 2021. As at 30 June 2021
the value of the Core properties was EUR163,945,000 with non-Core
properties held for sale of EUR4,140,000.
In 2020 the Group acquired a portfolio of six office buildings
at Millennium Park, Naas, County Kildare (the "Portfolio") for
EUR27.4 million (vendor price EUR25,300,000 and transaction costs
of EUR2,053,330). The Group also disposed of two non-Core
assets.
An external independent valuation is conducted on the Group's
owned properties on 30 June and 31 December each year, based upon
the key assumptions of estimated rental values and market-based
yields. In determining fair value, the valuers refer to market
evidence and recent transaction prices for similar properties.
The Directors are satisfied that the valuation of the Group's
properties is appropriate for inclusion in the financial
statements. The fair value of the Group's properties owned at 30
June 2021 is based on the valuation provided by the external
independent valuers, Lisney. This valuation is prepared on the
basis of market value in accordance with the Royal Institution of
Chartered Surveyors Valuation - Global Standards (Issued November
2019, effective from 31 January 2020) and the principles of IFRS 13
Fair Value. On 30 June 2020 the external valuers included the
following clause in their report: 'In considering the issue of
Valuation Certainty, the outbreak of the Novel Coronavirus
(COVID-19), declared by the World Health Organisation as a "Global
Pandemic" on the 11th March 2020, has impacted many aspects of
daily life and the global economy - with some real estate markets
experiencing significantly lower levels of transactional activity
and liquidity. As at the valuation date, in the case of the subject
properties there is a shortage of market evidence for comparison
purposes, to inform opinions of value. Our valuation of these
properties is therefore reported as being subject to 'material
valuation uncertainty' as set out in VPS 3 and VPGA 10 of the RICS
Valuation - Global
Standards. Consequently, less certainty - and a higher degree of
caution - should be attached to our valuation than would normally
be the case.'
This set of circumstances was not unique to the Company and the
material valuation uncertainty reported within the Lisney portfolio
valuation was in line with the RICS material valuation uncertainty
recommendation to all RICS registered property valuers as at that
valuation date. The clause has been removed for the 30 June 2021
valuation. This valuation has not been adjusted by the directors in
making their determination of the fair value of investment
properties at 30 June 2021 and 30 June 2020.
Fair value
The valuation technique used in determining the fair value of
the property assets is market value as defined by the Royal
Institution of Chartered Surveyors Valuation, being the estimated
amount for which an asset or liability should exchange on the
valuation date between a willing buyer and a willing seller in an
arm's length transaction after proper marketing wherein the parties
had acted knowledgeably, prudently and without compulsion. This is
in accordance with IFRS 13.
The main inputs for property valuation using a market-based
capitalisation approach are the Estimated Rental Value ("ERV") and
equivalent yield. ERV is a valuer's opinion as to the open market
rental value of a property on a valuation date which could
reasonably be expected to be the achievable rent for a new letting
of that property on the valuation date. ERVs a-re not generally
directly observable and therefore classified as Level 3 inputs.
Equivalent yields depend on the valuer's assessment of market
capitalisation rates and are therefore Level 3 inputs. There were
no transfers between fair value levels during the current and prior
period.
Details of the Group's investment properties (excluding held for
sale) and information about the fair value hierarchy using
unobservable inputs (level 3) at the end of the reporting period
are as follows:
30 June 2021:
Range
--------------------------------------------------
Asset Class Market value Input Low Median High
------------- ------------ -------- ----------- ---------
Commercial Property ERV per sq.
Assets EUR163.945m ft EUR4.00 EUR16.50 EUR28.50
------------- ------------ -------- ----------- ---------
Equivalent
yield 6.25% 7.40% 10.18%
------------- ------------ -------- ----------- ---------
30 June 2020:
Range
--------------------------------------------------
Asset Class Market value Input Low Median High
------------- ------------ -------- ----------- ---------
Commercial Property ERV per sq.
Assets EUR141.075m ft EUR4.06 EUR15.32 EUR33.34
------------- ------------ -------- ----------- ---------
Equivalent
yield 6.49% 7.86% 10.13%
------------- ------------ -------- ----------- ---------
Sensitivity of measurement to variance of significant
unobservable inputs
A decrease in the ERV will decrease the fair value. An increase
in equivalent yield will decrease the fair value. There are
interrelationships between these rates as they are partially
determined by market rate conditions.
The table below shows the sensitivity of the Group's properties
to changes in ERV and equivalent yield, which have been identified
as key assumptions by the directors. A change in long term vacancy
rate was not considered significant and was not therefore tested,
as the Group's long-term vacancy rates are low and lease contracts
are long in duration.
Across the entire portfolio of investment properties a 0.25%
increase in equivalent yield would have the impact of a EUR5.570
million (2020: EUR5.035 million) reduction in fair value whilst a
0.25% decrease in yield would result in a fair value increase of
EUR5.940 million (2020: EUR5.557 million), and a 5% increase in ERV
would have the impact of a EUR7.176 million (2020: EUR5.971
million) increase in fair value whilst a 5% decrease in ERV would
result in a fair value decrease of EUR7.292 million (2020: EUR5.695
million).
This is analysed by property class, as follows:
30 June 2021:
Market Value Value Value Value
Value +5% in -5% +0.25% -0.25%
ERV in Equivalent Equivalent
ERV Yield Yield
EUR EUR EUR EUR
Commercial property
assets EUR163.945m EUR7.176m (EUR7.292m) (EUR5.570m) EUR5.940m
Total properties EUR7.176m (EUR7.292m) (EUR5.570m) EUR5.940m
---------------------- ------------ ---------- ------------ ------------ ------------
30 June 2020:
Market Value Value Value Value -0.25%
Value +5% -5% +0.25% Equivalent
in ERV in Equivalent Yield
ERV Yield
EUR EUR EUR EUR
Commercial property
assets EUR114.075m 5.971m (5.695m) (5.035m) 5.557m
Total properties 5.971m (5.695m) (5.035m) 5.557m
---------------------- ------------ -------- --------- ------------ -------------
11. Property, Plant and Equipment
In September 2020 the Company entered a lease for its head
office. The right-of-use asset is the Company's office, there is a
corresponding lease liability disclosed in other payables (Note
14).
At 30 June 2021:
Computer Fixtures Right-of-use
&
Costs Equipment Fittings Asset Total
EUR EUR EUR EUR
--------------- ---------------------- -------------------------- ------------------------------ ---------------------
At 1 January
2021 8,862 10,000 249,632 268,494
Additions - - - -
Disposals - - - -
--------------- ---------------------- -------------------------- ------------------------------ ---------------------
At 30 June
2021 8,862 10,000 249,632 268,494
--------------- ---------------------- -------------------------- ------------------------------ ---------------------
Accumulated
Depreciation
At 1 January
2021 (3,282) (833) (24,963) (29,078)
Charge for the
period (1,477) (1,000) (37,445) (39,922)
At 30 June
2021 (4,758) (1,833) (62,408) (68,999)
--------------- ---------------------- -------------------------- ------------------------------ ---------------------
At 31
December
2020 5,580 9,167 224,669 239,416
At 30 June
2021 4,104 8,167 187,224 199,495
--------------- ---------------------- -------------------------- ------------------------------ ---------------------
At 31 December 2020:
Computer Fixtures Right-of-use
&
Costs Equipment Fittings Asset Total
EUR EUR EUR EUR
---------------------- ---------------------- ---------------------- ----------------------- ---------------------
At 1 January 2020 5,575 - - 5,575
Additions 3,287 10,000 249,632 262,919
Disposals - - - -
---------------------- ---------------------- ---------------------- ----------------------- ---------------------
At 31 December 2020 8,862 10,000 249,632 268,494
---------------------- ---------------------- ---------------------- ----------------------- ---------------------
Accumulated
Depreciation
At 1 January 2020 (858) - - (857)
Charge for the year (2,424) (833) (24,963) (28,220)
At 31 December 2020 (3,282) (833) (24,963) (29,078)
---------------------- ---------------------- ---------------------- ----------------------- ---------------------
At 31 December 2020 5,580 9,167 224,669 239,416
At 31 December 2019 4,717 - - 4,717
---------------------- ---------------------- ---------------------- ----------------------- ---------------------
12. Trade and other receivables
Current As at As at
30 June 31 December
2021 2020
EUR EUR
------------------------------------- ---------- -------------
Trade receivables and prepayments 284,168 251,976
Taxation debtors - VAT recoverable 812,643 252,303
Expected credit loss (13,126) (175,583)
Tenant lease incentive 159,777 92,893
Other receivables 325,111 654,990
Total 1,568,573 1,076,579
------------------------------------- ---------- -------------
Non-current As at As at
30 June 31 December
2021 2020
EUR EUR
----------------------------------- ---------- -------------
Trade receivables and prepayments 208,589 -
Tenant lease incentive 980,982 793,333
----------------------------------- ---------- -------------
Total 1,189,571 793,333
----------------------------------- ---------- -------------
Trade receivables include amounts due from tenants for rental
and service charges.
The VAT recoverable amount relates to the VAT which is
recoverable on the development expenditure.
The expected credit Loss ("ECL") allowance is calculated
according to a provision matrix and totals EUR13,126 (2020:
EUR175,583 or EUR85,879 to June 2020). The balance of trade and
other receivables has no concentration of credit risk as it covers
mainly prepayments. The Directors therefore consider the carrying
value of trade and other receivables approximates to their fair
value.
A new lease incentive was granted to a tenant whose lease
started on 1 January 2021.
Other receivables balance includes costs that have been incurred
by the Company and can be recovered from tenants under the terms of
existing leases along with deposits and other amounts
recoverable.
13. Cash and cash equivalents
As at As at
30 June 31 December
2021 2020
EUR EUR
--------------------------- ----------- -------------
Cash and cash equivalents 11,268,916 10,721,464
--------------------------- ----------- -------------
Of the cash balance as at 30 June 2021 EUR5,397,422 (2020:
EUR3,255,070) is classified as restricted cash. As part of the
Company's facility agreement rent paid in advance on the secured
properties is collected into a rent account controlled by the
facility provider. The amount of this cash as at 30 June 2021 was
EUR4,698,753 (2020: EUR2,447,732). Rent in excess of accrued
facility interest is released at the end of each quarter to an
account controlled by the Group. Dilapidation amounts received by
the Group on secured properties total an additional EUR403,669
(2020: EUR807,338) which was similarly held as restricted cash at
the period end in line with facility banking covenants and other
transaction agreements. Deposits of EUR295,000 (2020: EURNil) were
held by the Company's solicitors against the investment properties
held for sale.
14. Trade and other payables
Current As at As at
30 June 31 December
2021 2020
EUR EUR
--------------------------------- ---------- -------------
Trade payables and accruals 4,030,852 3,275,168
Accrued construction costs 1,938,614 -
Tenant lease incentives 414,004 771,450
Taxation creditors - PAYE/PRSI 28,968 28,911
Borrowings (note 15) 32,088 30,603
Lease obligations 76,690 76,690
Other payables 443,775 541,393
--------------------------------- ---------- -------------
Total 6,964,991 4,724,215
--------------------------------- ---------- -------------
Non-current As at As at
30 June 31 December
2021 2020
EUR EUR
------------------ --------- -------------
Lease obligation 115,035 153,379
------------------ --------- -------------
Total 115,035 153,379
------------------ --------- -------------
Trade payables includes amounts due to third party suppliers and
prepaid rent amounts received from tenants in advance. Accrued
expenses include operational expenses incurred but not yet invoiced
to the Group as at 30 June 2021. Trade and other payables are
interest free and have settlement dates within one year. The
Directors consider that the carrying values of the trade and other
payables approximate to their fair value.
Accrued construction costs relate to the industrial property
under development as set out in note 10. The costs accrued are
those incurred by the developer and the Group at as 30 June 2021
and payable by the Group under the agreement.
Other payables include deposits held against the sale of
non-Core buildings and a sinking fund which was acquired as part of
a 2020 property purchase. Some payables which were previously
included in other payables at year end have been reallocated to
accruals.
Group as a Lessee
The Group has a three-year lease contract for its head office
which started in September 2020. The Group's obligations under its
leases are secured by the lessor's title to the leased assets.
Generally, the Group is restricted from assigning and subleasing
the leased asset without landlord consent. The Group also held a
property lease with a term of less than 12 months until September
2020. The Group applied the 'short-term lease' and 'lease of
low-value assets' recognition exemptions for this lease.
The carrying amounts of the lease liabilities (included under
interest-bearing loans and borrowings) and their movements during
the year are shown below :
30 June 2021 31 December
2020
EUR EUR
----------------------- ------------- ------------
Opening 230,069 -
Additions - 249,632
Accretion of interest 656 437
Payments (39,000) (20,000)
----------------------- ------------- ------------
Total 191,725 230,069
----------------------- ------------- ------------
Current 76,690 76,690
----------------------- ------------- ------------
Non-current 115,035 153,379
----------------------- ------------- ------------
15. Borrowings
The Group has a revolving credit facility with Allied Irish Bank
plc ("AIB"), secured by fixed and floating charges over certain
property assets. The facility is EUR53,595,000 (2020:
EUR53,595,000) and can be repaid and re-drawn without penalty
throughout its four-year expected life (extendable by a further
year). This loan facility was measured initially at fair value,
after transaction costs, and carried at amortised cost, with all
attributable costs being charged to the Condensed Consolidated
Statement of Comprehensive Income over the life of the
facility.
There were no principal loan facility repayments during the
period to 30 June 2021. Bank finance repaid during the period is
the interest paid and due on the loan facility, similar to prior
periods.
The Company targets borrowings of 40% loan-to-value ("LTV"). LTV
is the ratio of drawn debt to the value of property investments,
which at 30 June 2021 was 29.6% (2020: 27.2%). The Company
continues to monitor progress towards this target. Under the Irish
REIT rules the Group's borrowings must not exceed 50% of the value
of its property.
Reconciliation of borrowings is shown Six months As at
below ended 31 December
30 June 2021 2020
EUR EUR
Balance at the beginning of the period 38,309,197 20,419,260
Bank finance drawn during the period 11,200,000 19,805,638
Bank repaid during the period - (2,000,000)
Interest during the financial period (528,123) (1,032,044)
Less: Borrowing costs extinguished - (430,178)
Less: Borrowing costs - (267,652)
Plus: effective interest rate 565,585 1,814,173
-------------- -------------
Balance at end of the period 49,546,659 38,309,197
Maturity of borrowings is as follows
Less than one year (Note 14) 32,088 30,603
Between two and five years 49,514,571 38,278,594
-------------- -------------
Total 49,546,659 38,309,197
Undrawn at end of the period 3,798,623 14,998,623
-------------- -------------
All borrowings are denominated in Euro. All borrowings are
subject to six months or less interest rate changes and contractual
re-pricing rates.
Net Debt and Net Debt LTV
Net debt and net debt LTV are key metrics in the Group. Net debt
is redemption value of borrowings as adjusted by cash available for
use. Net debt LTV is the ratio of net debt to investment property
value at the measurement date. The lease of the head office
disclosed in note 14 is not deemed material for the purposes of the
net debt calculation.
30 June 31 December
2021 2020
EUR EUR
--------------------------------- ------------- ----------------
Cash and cash equivalents 11,268,916 10,721,464
Cash reserved* (141,076) (171,076)
Gross debts (49,546,659) (38,309,197)
------------- ----------------
Net debt at year end (38,418,819) (27,758,809)
Investment property at year end 168,085,000 141,925,000
Net Debt to value ratio 22.86% 19.60%
--------------------------------- ------------- ----------------
*These balances are not viewed as available funds for the
purposes of the above calculation. The restricted cash in note 13
includes the funds received in the rental account which can be used
for the net debt calculation.
16. IFRS and EPRA NTA per share
The IFRS NAV is calculated as the value of the Group's assets
less the value of its liabilities based on IFRS measures. EPRA NTA
is calculated with accordance with the European Real Estate
Association ("EPRA") Best Practice Recommendations (BPR)
Guidelines, October 2019.
EPRA net tangible assets ("EPRA NTA") assumes that entities buy
and sell assets, thereby crystallising certain levels of
unavoidable deferred taxation.
As at As at
30 June 31 December
2021 2020
------------------------------------ ------------- --------------
IFRS net assets at end of period 125,720,431 111,603,077
Ordinary shares in issue 124,922,210 111,572,210
------------------------------------ ------------- --------------
IFRS NAV per share (cents) 100.64 100.03
------------------------------------ ------------- --------------
Ordinary shares in issue 124,922,210 111,572,210
------------------------------------ ------------- --------------
Diluted number of shares 125,300,030 111,865,838
------------------------------------ ------------- --------------
Diluted IFRS NAV per share (cents) 100.34 99.77
------------------------------------ ------------- --------------
As at As at
30 June 31 December
2021 2020
EUR EUR
------------------------------------ ------------ --------------
IFRS net assets at end of period
Net market to market on financial 111,603,077
assets 125,720,431 -
------------------------------------ ------------ --------------
EPRA NTA 125,720,431 111,603,077
------------------------------------ ------------ --------------
EPRA NTA per share (cents) 100.34 99.77
------------------------------------ ------------ --------------
The Company's IFRS net asset value per ordinary share of 100.64
cents (2020: 100.03 cents) is based on equity shareholders' funds
of EUR125,720,431 (2020: EUR111,603,077) and on 124,922,210 (2020:
111,572,210) ordinary shares, being the undiluted number of shares
in issue at the period end.
17. Share Capital
As at As at
30 June 2021 30 December
2020
---------------- -------------
Shares in issue 124,922,210 111,572,210
---------------- ------------- ------------
The Group has authorised and issued share capital of 125m
Ordinary Shares.
Share capital is fully paid. There is one class of ordinary
share at par value of EUR0.01 per share.
EUR
Issued in Total at period
period end
----- ---------- ---------------
2018 750,000 750,000
2019 365,722 1,115,722
2020 - 1,115,722
2021 133,500 1,249,222
----- ---------- ---------------
On 19 April 2021 the Company issued 13,350,000 new Ordinary
Shares of EUR0.01 each in the Company to be admitted to trading on
AIM and Euronext Growth for gross proceeds of EUR12,682,500. The
new Ordinary Shares included 13,192,631 Placing Shares and 157,369
Subscription Shares.
18. Reserves
The equity of the Company consists of Ordinary Shares issued,
Share premium and retained earnings. The par value of the shares is
recorded in the share capital account. The excess of proceeds
received over the par value is recorded in the share premium
account. Direct issue costs in respect of the issue of shares are
accounted for in the retained earnings reserve, net of any related
tax deduction. The share-based payment reserve reflects awards made
under the LTIP.
19. Distributions made and declared
Cash dividends to the equity holders Six months Six months
of the Company: to to
30 June 30 June
2021 2020
EUR EUR
------------------------------------------- ----------- -----------
Dividends on ordinary shares declared
and paid
Interim dividend for Q4 2019: 1.04 cents
per share 1,160,351
Interim dividend for Q1 2020: 1.20 cents
per share 1,338,867
Interim dividend for Q4 2020: 1.40 cents
per share 1,562,011
Interim dividend for Q1 2021: 1.25 cents
per share 1,394,653
------------------------------------------- ----------- -----------
Total 2,956,664 2,499,218
------------------------------------------- ----------- -----------
Declared dividend on ordinary
shares
Interim dividend for Q2 2020:
1.25 cents per share
Interim dividend for Q2 2021:
1.30 cents per share 1,623,989 1,349,653
-------------------------------- ------------ ----------
The declared Q2 2021 interim dividend on ordinary shares was
declared on 29 June 2021 and paid to shareholders on 29 July 2021,
as it was unpaid at period end it has not been included in the
results to 30 June 2021.
20. Related Party Transactions
Subsidiaries
All transactions between the Company and its subsidiaries are
eliminated on consolidation. During the period the Group
established Yew Grove Holdco One Limited for the ownership of a
development at the IDA Business & Technology Park, Athlone.
There is equity issued by Yew Grove Holdco One Limited but no
equity issued by the other subsidiaries. The management company
subsidiaries are limited by guarantee and do not have share
capital. The subsidiaries of the Group are:
Name of subsidiary Registered Nature of Membership Equity Votes controlled
Address/Country the business ownership by the
of Incorporation Company
1(st) Floor,
Yew Grove 57 Fitzwilliam Holding
Holdco One Square, Dublin Investment
Limited 2, Ireland property 1/1 100% 100%
-------------------- --------------- ----------- ----------- -----------------
Gateway Estate 2(nd) Floor, Management 2/3 N/A 99% of
Management River House, of common voting
Company Limited East Wall Road, areas rights
by Guarantee Dublin 3, Ireland
-------------------- --------------- ----------- ----------- -----------------
Mallow Business Mallow Business Management 1/2 N/A 66% of
Park Management Park, Gooldhill, of common voting
Company Limited Mallow, Co. areas rights
by Guarantee Cork, Ireland
-------------------- --------------- ----------- ----------- -----------------
The sole joint venture of the Group is:
Name of joint venture Registered Address/Country Nature of Votes controlled
of Incorporation the business by the Company
Ashtown Management Friends First House, Management
Company Limited Cherrywood, Loughlinstown, of common
by Guarantee Co. Dublin, Ireland areas 50%
----------------------------- --------------- -----------------
The joint venture had a break even result for the period to 30
June 2021 (2020: break even).
Associates
During 2020 the Company acquired a portfolio of six office
buildings at Millennium Park, Naas Co. Kildare, following which the
Company has a holding in management companies associated with those
properties, listed below. The Company does not exert control over
these management companies, they have been classified as
associates. There is no equity issued by the associates as they are
management companies limited by guarantee not having share capital.
These associates are operated on a break even basis and do not
impact on the results of the group.
Name of subsidiary Registered Address/Country Nature of the Votes controlled
of Incorporation business by the Company
Naas Millennium C/O Tetrarch Capital Management of 13.8% of voting
(East) Management Limited, Heritage common areas rights
Company Limited House, 23 St. Stephen's
by Guarantee Green, Dublin 2,
Ireland
--------------------------- -------------- -----------------
Naas Millennium C/O Tetrarch Capital Management of 12.23% of voting
(West) Management Limited, Heritage common areas rights
Company Limited House, 23 St. Stephen's
by Guarantee Green, Dublin 2,
Ireland
--------------------------- -------------- -----------------
Osberstown Management C/O Tetrarch Capital Management of 3.87% of voting
Company Limited Limited, Heritage common areas rights
by Guarantee House, 23 St. Stephen's
Green, Dublin 2,
Ireland
--------------------------- -------------- -----------------
Directors' participation in share issuance
On 19 April 2021 the Company issued 13,350,000 new Ordinary
Shares of EUR0.01 each in the Company which were admitted to
trading on AIM and Euronext Growth. The new Ordinary Shares
included 13,192,631 Placing Shares and 157,369 Subscription Shares,
the subscription shares were subscribed for by Directors at the
placing price, as shown below.
Director No.
of shares EUR
Jonathan Laredo 26,316 25,000
Charles Peach 26,316 25,000
Eimear Moloney 36,842 35,000
Brian Owens 31,579 30,000
Gary O'Dea 26,316 25,000
Barry O'Dowd 10,000 9,500
----------------- ----------- --------
Total 157,369 149,500
The Directors are considered to be related parties. No Director
had an interest in any other transactions which are, or were,
unusual in their nature or significant to the nature of the
Company.
Other related parties
No other related party transactions have occurred.
21. Directors' remuneration
The Directors of the Group received remuneration, fees and other
benefits from the Group for their services. Total amounts for the
period were EUR462,870 (2020: EUR445,533). No remuneration, fees or
other benefits were paid to the Directors by any subsidiary,
associate or joint venture.
Six months to Six months to
30 June 30 June
2021 2020
EUR EUR
----------------------------------------------- ------------- -------------
Remuneration and other emoluments 193,017 187,506
Other benefits - Health insurance 11,754 11,753
Share based payments 84,193 75,024
Pension contributions - defined contributions
plan (3 executive Directors)
Remuneration - Independent Non-executive
Directors 58,906 56,250
115,000 115,000
----------------------------------------------- ------------- -------------
Total 462,870 445,533
----------------------------------------------- ------------- -------------
The remuneration of Directors and key management is determined
by the Remuneration Committee to reflect the performance of
individuals and market trends. Other benefits paid to the Executive
Directors during the period includes health insurance. Defined
contribution pension payments represent contributions on behalf of
the Executive Directors. All fees paid to Non-Executive Directors
are for services as Directors to the Group, they receive no other
benefits. There were no payments of compensation made to Directors
for termination or loss of office.
Share based payments
For the six-month period ended 30 June 2021, the Group has
recognised EUR84,193 (2020: EUR75,024) of share-based payment
expense, EURnil was recognised from 2019, EUR59,278 from the 2020
award and EUR24,915 from the 2021 Long Term Incentive Plan ("LTIP")
award in the Condensed Consolidated Statement of Comprehensive
Income.
On 23 March 2021 the Remuneration Committee granted 875,054
share options to senior executives and staff under the LTIP. The
exercise price of the options of EUR0.01 equals the nominal value
of the underlying ordinary shares. The options' vesting is
dependent on the Company's performance against
two criteria, being Relative Total Shareholder Return ("TSR")
for 50% of the options and Absolute Total
Property Return for the remaining 50% of the options. The
Company has set performance conditions for each criteria, 30% of
options vest if performance equals the lower hurdle, 100% if at or
above higher
hurdle, the extent of vesting will be determined on a straight
line basis where performance is between the hurdles.
Vesting is three years from the date of grant and requires the
senior executive and staff to still be employed by the Company on
such date. If the lower hurdles are not met, the options lapse. The
vested
options must be exercised within seven years of grant. The fair
value at grant date is estimated using a
Monte Carlo simulation pricing model, taking into account the
terms and conditions upon which the options were granted. There is
no cash settlement of the grant. The fair value of options granted
during
the period to 30 June 2021 was estimated on the date of grant
using the following assumptions:
-- Dividend yield (%) 5.77
-- Volatility (%) 22.52
-- Risk-free interest rate (%) 0.00
-- Vesting period of share options (years) 3.0
-- Grant date share price (EUR) 0.95
While the TSR linked option values calculated are based on
market based assumptions, the Absolute Total Property Return per
share linked options, being non-market based, required management
assumptions as to the probability of their respective hurdles being
achieved.
22. Events after the reporting period
On 5 July 2021 the sale of Old Mill Lane, Listowel completed for
a sales price of EUR1,950,000, the Company realised a gain of
EUR218,684 for this sale.
On 6 July 2021 the sale Canal House, Portarlington completed for
a sales price of EUR1,000,000, the Company realised a gain of
EUR74,190 for this sale.
On 27 July 2021 the Company paid an interim dividend (property
income distribution) for Q2 2021 of 1.30 cents per ordinary share.
This dividend had been declared on 27 June 2021.
23. Capital commitments
The contract for the Company's development at the IDA Business
and Technology Park Athlone, which is outlined in Note 10, has a
further estimated amount of EUR6m committed over the next 12
months. Other than the this, the Group has no other material
capital commitments at the Condensed Statement of Financial
Position date.
24. Contingent liabilities
As part of the development contract for the asset under
construction, an amount equal to half of the difference between the
appraised valuation at completion and the total cost of
construction (if positive) will be due to the developer following
completion. The Group has not identified any other contingent
liabilities which are required to be disclosed in the Condensed
Consolidated Financial Statements.
Alternative performance measures
An alternative performance measure ("APM") is a measure of
financial or future performance, position or cashflows of the Group
which is not a measure defined by International Financial Reporting
Standards ("IFRS").
The following are the APMs used in this report together with
information on their calculation and relevance.
APM Description
Contracted rent roll Annualised cash rental income (net of car
park licence income) being received as at
the stated date.
---------------------------------------------------
Loan to value Outstanding drawings under loan facilities
as a percentage of the fair value of the
investment properties.
---------------------------------------------------
Net debt loan to Net debt as a percentage of the fair value
value of the investment properties.
---------------------------------------------------
Reversionary rent The annualised cash rental income (net of
roll car park licence income) that would be received
if the property or properties were leased
at ERV.
---------------------------------------------------
Total shareholder A measurement of the growth in share value
return for shareholders (assuming gross dividends
are reinvested and share price appreciation)
over a defined period.
---------------------------------------------------
Weighted average An indicator of the average remaining life
unexpired lease term of a lease or group of leases within the
(" WAULT") portfolio.
---------------------------------------------------
Gross yield at fair The contracted rent roll as at the stated
value date, divided by the fair value of the investment
properties as at the reporting date.
---------------------------------------------------
Gross reversionary The ERV of a property or group of properties
yield as a percentage of their fair value.
---------------------------------------------------
European Public Real Estate Association ("EPRA") Performance
Measures (unaudited)
EPRA performance measures presented here are calculated
according to the EPRA Best Practices Recommendations Guidelines
October 2019. EPRA performance measures are used in order to
enhance transparency and comparability with other public real
estate companies in Europe.
EPRA earnings and EPRA NAV measures are also included within the
financial statements, in which they are audited, as they are
important key performance indicators. All measures are presented on
a consolidated basis only and, where relevant, are reconciled to
IFRS measures as presented in the condensed consolidated financial
statements.
EPRA Measure IFRS Note Description
measure
EPRA earnings IFRS (i) As EPRA earnings is used to measure the
profit operational performance of the Group,
after it excludes all components not relevant
tax to the underlying net income performance
of the portfolio, such as the change
in value of the underlying investments
and any gains or losses from the sales
of investment properties.
----------- ------ -----------------------------------------------
EPRA earnings IFRS (i) Earnings from Core operational activities.
per share EPS A key measure of a company's underlying
operating results from its property rental
business and an indication of the extent
to which current dividend payments are
supported by earnings.
----------- ------ -----------------------------------------------
EPRA Net IFRS (iii) Assumes that entities never sell assets
Reinstatement NAV and aims to represent the value required
Value ("NRV") to rebuild the entity.
----------- ------ -----------------------------------------------
EPRA Net IFRS (iii) Assumes that entities buy and sell assets,
Tangible NAV thereby crystallising certain levels
Assets ("NTA") of unavoidable deferred tax.
----------- ------ -----------------------------------------------
EPRA Net IFRS (iii) Represents the shareholders' value under
Disposal NAV a disposal scenario, where deferred tax,
Value ("NDV") financial instruments and certain other
adjustments are calculated to the full
extent of their liability, net of any
resulting tax.
----------- ------ -----------------------------------------------
EPRA Net NA (iv) Annualised rental income based on the
Initial cash rents passing at the balance sheet
Yield ("NIY") date, less non-recoverable property expenses,
divided by the market value of the property
with (estimated) purchasers' costs.
----------- ------ -----------------------------------------------
EPRA 'topped NA (iv) This measure incorporates an adjustment
up' Net to EPRA NIY for rent-free-periods or
Initial other unexpired lease incentive discounted
Yield rent periods and stepped rents.
----------- ------ -----------------------------------------------
EPRA Vacancy NA (v) Estimated Market Rental Value (ERV) of
Rate any vacancy in the portfolio divided
by the ERV of the whole portfolio
----------- ------ -----------------------------------------------
EPRA cost IFRS (vi) Calculated using all administrative and
ratios operating operating expenses under IFRS net of
expenses service fees. It is measured including
and excluding vacancy costs.
----------- ------ -----------------------------------------------
EPRA Performance Measure 30 June 2021 31 December
2020
Before exceptional
item 5,560,290
After exceptional item
EPRA Earnings (note 11) 4,660,290 6,136,655
------------------------- ------------
IFRS NAV (note 12) 100.64 100.03
------------------------- ------------
EPRA Net Reinstatement Value
(NRV) 113.46 112.35
------------------------- ------------
EPRA Net Tangible Assets (NTA) 100.34 99.77
------------------------- ------------
EPRA Net Disposal Value (NDV) 100.34 99.77
------------------------- ------------
EPRA Net Initial Yield (NIY) 6.9% 6.4%
------------------------- ------------
EPRA 'topped up' NIY 7.3% 6.7%
------------------------- ------------
EPRA Vacancy Rate 4.7% 6.9%
------------------------- ------------
EPRA Cost Ratios:
EPRA Cost Ratio (including Before exceptional 26.4%
direct vacancy costs) item 28.6%
After exceptional item
EPRA Cost Ratio (excluding 44.4% 23.5%
direct vacancy costs)
Before exceptional
item 26.8%
After exceptional item
42.5%
------------------------- ------------
i. EPRA Earnings
For calculations, please refer to note 9
ii. IFRS NAV
For calculations, please refer to note 17
iii. EPRA NRV, EPRA NTA and EPRA NDV
As at 30 June 2021 EPRA NRV EPRA NTA EPRA NDV
EUR EUR EUR
IFRS NAV 125,720,430 125,720,430 125,720,430
Include:
Real estate transfer tax(8) 16,450,832 - -
---------------------------------- ------------ ------------ ------------
NAV performance measure 142,171,262 125,720,430 125,720,430
Diluted number of shares
at financial year end (million) 125 125 125
NAV per share at financial
year end 113.46 100.34 100.34
As at 31 December 2020 EPRA NRV EPRA NTA EPRA NDV
EUR EUR EUR
IFRS NAV 111,603,077 111,603,077 111,603,077
Include:
Real estate transfer tax 14,078,960 - -
---------------------------------- ------------ ------------ ------------
NAV performance measure 125,682,037 111,603,077 111,603,077
Diluted number of shares
at financial year end (million) 112 112 112
NAV per share at financial
year end 112.35 99.77 99.77
(8) 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 estimated at 9.92% by the external
valuer.
iv. EPRA Net Initial Yield (NIY) and EPRA "topped-up" NIY
31 December
30 June 2021 2020
EUR EUR
Investment property 168,085,000 141,925,000
Less: Developments (2,250,000) -
Completed property portfolio 165,835,000 141,925,000
Allowance for estimated purchasers'
costs 16,450,832 14,078,960
Gross up completed property portfolio
valuation 182,285,832 156,003,960
Annualised cash passing rental income 12,836,761 10,378,534
Property outgoings (296,997) (414,740)
Annualised net rents 12,539,764 9,963,794
Rent free/other lease incentives (9) 713,377 543,108
-------------- -----------------------
Topped-up net annualised rent 13,253,141 10,506,902
EPRA NIY 6.9% 6.4%
EPRA "topped-up" NIY 7.3% 6.7%
(9) There are two rent free periods one ending in December 2021
and the other ending in January 2022.
v. EPRA Vacancy rate
30 June 31 December
2021 2020
EUR EUR
Estimated Rental Value of vacant space 670,650 853,550
Estimated Rental Value of the whole portfolio 14,202,415 12,403,015
------------ ------------------
EPRA Vacancy Rate 4.7% 6.9%
vi. EPRA Cost ratios
Before exceptional After exceptional
item item
30 June 30 June 31 December
2021 2021 2020
EUR EUR EUR
IFRS Administrative/operating
expense 1,672,479 2,572,479 2,880,829
Property management fees (38,691) (38,691) (80,564)
Ground rent costs (185) (185) (728)
------------------
EPRA Costs (including direct vacancy
costs) 1,633,603 2,533,603 2,799,537
Direct vacancy costs (107,427) (107,427) (306,974)
------------------- ------------------ -------------
EPRA Costs (excluding direct vacancy
costs) 1,526,176 2,426,176 2,492,563
------------------- ------------------ -------------
IFRS Rental income 5,703,972 5,703,972 10,599,687
EPRA Costs Ratio (including direct
vacancy costs) 28.6% 44.4% 26.4%
EPRA Costs Ratio (excluding direct
vacancy costs) 26.8% 42.5% 23.5%
There are no administration costs capitalised in the year, there
is one construction contract in place at period end as detailed in
note 10.
Glossary
BER: Building energy rating
CBD: The central business district of a city.
Contracted rent roll : The annualised cash rental income
(including car park licence income) being received as at the stated
date.
Debt to Equity gearing: The ratio calculated by dividing the
amount of drawn loans by the Net Asset Value of the Group.
Dublin Catchment Area: The geographic area within an
approximately thirty-minute commute of the M50 motorway.
EPRA: The European Public Real Estate Association.
EPRA EPS : is calculated by dividing EPRA Earnings for the
reporting period attributable to shareholders of the Company by the
weighted average number of ordinary shares outstanding during the
reporting period. EPRA Earnings measures the level of income
arising from operational activities. It is intended to provide an
indicator of the underlying income generated from leasing and
management of the property portfolio and so excludes components not
relevant to the underlying net income performance of the portfolio
such as unrealised changes in valuation and any gains or losses on
disposals of properties.
ERV/ Estimated Rental Value: A valuer's opinion as to the open
market rental value of a property on a valuation date which could
reasonably be expected to be the achievable rent for a new letting
of that property on the valuation date. Colloquially referred to as
market rent.
ESG: Environmental, social and governance.
Foreign Direct Investment companies ("FDI"): Overseas companies
that have established operations in Ireland, often with the
assistance of IDA Ireland.
Gale Date: The day on which rent or interest is due.
Gross reversionary yield: The reversionary rent roll of a
property or group of properties as a percentage of their fair
value.
Gross yield at fair value: A calculation of the current expected
cash rental return, being the contracted rent roll divided by the
fair value of the investment property or properties.
Ireland: The Republic of Ireland
Loan to Value/LTV : The LTV is calculated by dividing the amount
of drawn loans by the fair value of the Company's investment
properties.
Net Initial Yield ("NIY"): Annualised rental income based on the
cash rents passing at the balance sheet date, less non-recoverable
property operating expenses, divided by the market value of the
property, increased with (estimated) purchasers' costs.
Net valuation gain: The fair value gain over the period (from
the shorter of the time to the last valuation or purchase).
Purchases made since the last valuation are initially recognised at
price including transaction costs.
Next rent reversion date: The earliest following date at which
the Company could be expected to choose to re-let a property or
re-set the rent at that property's ERV.
Property income: As defined in section 705A of the Taxes
Consolidation Act, 1997. It means, in relation to a company or
group, the Property Profits of the Company or Group, as the case
may be, calculated using accounting principles, as: (a) reduced by
the Property Net Gains of the Company or Group, as the case may be,
where Property Net Gains arise, or (b) increased by the Property
Net Losses of the Company or Group, as the case may be, where
Property Net Losses arise.
Property Net Losses: As defined in section 705A of the Taxes
Consolidation Act, 1997.
Property Net Gains: As defined in section 705A of the Taxes
Consolidation Act, 1997.
Property Profits: As defined in section 705A of the Taxes
Consolidation Act, 1997.
Property Rental Business : As defined in section 705A of the
Taxes Consolidation Act, 1997.
QIAIF: A Qualifying Investor Alternative Investment Fund.
Rent review: A clause often included in property leases that
provides for a periodic adjustment of the rent of a property to the
market level of rent.
Reversion: A term used to describe the difference in rent from
that which is currently due on outstanding leases and the ERV.
Under-rented properties have contracted rents lower than ERV,
over-rented properties have contracted rents higher than ERV.
Reversionary rent roll: The annualised cash rental income (net
of car park licence income) that would be received if the property
or properties were leased at ERV.
Seed portfolio : The portfolio of investment properties owned by
the Yew Tree Investment Fund (Dissolved) when it was purchased on 8
June 2018.
SME : As defined by Enterprise Ireland, an enterprise that has
between 50 employees and 249 employees and has either an annual
turnover not exceeding EUR50m or an annual balance sheet total not
exceeding EUR43m.
State Body: a body established by legislation in the Republic of
Ireland which is either entirely or majority owned by the Irish
Government
Total expense ratio ("TER"): The ratio of the Company's
annualised expenses, excluding transaction costs, financing costs
and capital expenses as a percentage of the average net assets
during that period.
Total shareholder return: The growth in share value over a
period assuming all dividends are reinvested in shares of the
Company when paid.
Vacancy: Lettable space owned by the Company which is not let or
licenced to a tenant.
WAULT: Weighted average unexpired lease term
Corporate Information
Directors Barry O'Dowd (Chair, Independent Non-executive
Director)
Eimear Moloney (Independent Non-executive
Director)
Garry O'Dea (Independent Non-executive
Director)
Brian Owens (Independent Non-executive
Director)
Jonathan Laredo (Chief Executive Officer)
Charles Peach (Chief Financial Officer)
Michael Gibbons (Chief Investment Officer)
Registered office 1(st) Floor
57 Fitzwilliam Square
Dublin 2, Ireland
Company Secretary Tarryn Van Beek
AIFM Ballybunion Capital Limited
Ashley House
Morehampton Road
Dublin 4, Ireland
Euronext Sponsor Goodbody Stockbrokers
and Joint Broker Ballsbridge Park
Ballsbridge
Dublin 4, Ireland
Nominated Adviser Liberum Capital Limited
and Joint Broker Ropemaker Place,
25 Ropemaker Street,
London EC2Y 9LY
Legal Adviser William Fry
to the Company Grand Canal Square
as to Irish law Grand Canal Dock
Dublin 2, Ireland
Registrar Link Asset Services
Link Registrars Limited
2 Grand Canal Square
Dublin 2
Depositary and
Custodian Société Générale S.A.,
Dublin Branch
3rd Floor, IFSC House
IFSC
Dublin 1, Ireland
Valuer Lisney Limited
St. Stephen's Green House
Dublin 2, Ireland
Auditor Deloitte Ireland LLP
Chartered Accountants and Statutory Audit
Firm
Deloitte & Touche House
29 Earlsfort Terrace
Dublin 2, Ireland
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(END) Dow Jones Newswires
August 27, 2021 02:00 ET (06:00 GMT)
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