EPRA Investor Presentation - Irish Residential Properties REIT plc - Irish Residential Properties REIT ...
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Irish
Residential
Properties
REIT plc
EPRA
Investor
Presentation
June 2021
1
DISCLAIMER
Cautionary Statements of this presentation or its contents or otherwise arising in To the extent indicated, certain industry, market and
This presentation has been prepared by Irish Residential connection with this presentation. Certain financial and competitive position data contained in this presentation come
Properties REIT PLC (the “Company” or “IRES”) for information statistical information contained in this presentation is subject from third party sources. Third party industry publications,
purposes only. to rounding adjustments. Accordingly, any discrepancies studies and surveys generally state that the data contained
between the totals and the sums of the amounts listed are due therein have been obtained from sources believed to be
This presentation has been prepared in good faith but the torounding. reliable, but that there is no guarantee of the accuracy or
information contained in it has not been independently verified completeness of such data. While the Company believes that
and does not purport to be comprehensive. The Company is This presentation contains forward-looking statements which each of these publications, studies and surveys has been
not undertaking any obligation to provide any additional can be identified by the use of terms such as "may", "will", prepared by a reputable source, neither the Company nor IRES
information or to update this presentation or to correct any "should", "expect", "anticipate", "project", "estimate", "intend", Fund Management have independently verified the data
inaccuracies that become apparent. This presentation is "continue", "target" or "believe" (or the negatives thereof) or contained therein. In addition, certain of the industry, market
neither a prospectus nor an offer nor an invitation to apply for other variations thereon or comparable terminology. Such and competitive position data contained in this presentation
securities. The information contained in this presentation is forward-looking statements are based on the beliefs of its may come from the Company’s own internal research and
subject to material updating, completion, revision, amendment management as well as assumptions made and information estimates based on the knowledge and experience of the
and verification. Any prospective investor must make its own currently available to the Company. Forward-looking Company and IRES Fund Management in the Irish market.
investigation and assessments and consult with its own adviser statements speak only as of the date of this presentation and While the Company believes that such research and estimates
concerning any evaluation of the Company and its prospects. the Company and IRES Fund Management expressly disclaim are reasonable and reliable, they, and their underlying
any obligation or undertaking to release any update of, or methodology and assumptions, have not been verified by any
No representation or warranty, express or implied, is given by revisions to, any forward-looking statements in this independent source for accuracy or completeness and are
or on behalf of the Company, its group companies, IRES Fund presentation, including any changes in its expectations or any subject to change. Accordingly, undue reliance should not be
Management Limited (“IRES Fund Management”) or any of changes in events, conditions or circumstances on which these placed on any of the industry, market or competitive position
their respective shareholders, directors, officers, employees, forward-looking statements are based including in respect of data contained in this presentation.
advisers, representatives, agents or any other persons as to the Covid-19 pandemic, the uncertainty of its duration and
the accuracy, completeness, fairness or sufficiency of the impact, and any government regulations or legislation related Please refer to the Principal Risks and Uncertainties
information, projections, forecasts or opinions contained in this to it. Due to various risks and uncertainties, actual events or section contained in the Annual Report 2020 for further
presentation. Save in the case of fraud, no liability is accepted results or actual performance of the Company may differ details
for any errors, omissions or inaccuracies in any of the materially from those reflected or contemplated in such
information or opinions in this presentation and neither of the forward-looking statements. No representation or warranty is
Company or IRES Fund Management, nor any of their made as to the achievement or reasonableness of, and no
employees, officers, directors, advisers, representatives, reliance should be placed on, such forward-looking
agents or affiliates, shall have any liability whatsoever (in statements. There is no guarantee that the Company will
negligence or otherwise, whether direct or indirect, in contract, generate a particular rate of return.
tort or otherwise) for any loss howsoever arising from any use
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 2
KEY HIGHLIGHTS
› Portfolio of 3,836 high-quality living spaces across 36 properties1
Attractive Portfolio Delivering
Sustainable Long-term Returns › Modern diversified portfolio predominantly in the mid-tier range, average age of 11.2 years2
› Gross yield at fair value of 5.5%2
› Total Accounting Return of 7.7% in 2020, supported by continued growth in dividends (up 3% year-on-year)2
› Revenues up 20.4% in 2020, NRI increased by 18.3% year-on-year with strong NRI margin of 80.0%
Resilient Financial & Operational
Performance despite Covid-19
› Active stakeholder engagement throughout COVID-19 pandemic
› Occupancy 98.4% and strong rent collection rates of 98.9%2
› c.50% portfolio unit growth over the last 3 years2
Clear Investment & › Execution of 3-pronged growth strategy – acquisitions, forward purchases/ funding and development
Growth Strategy
› Pipeline for growth of c.18% in the portfolio (number of units)
› Recent recycling of assets, through acquisitions and dispositions
› Robust balance sheet, strong liquidity, debt maturities from 2024 – 2032
Robust Capital
Structure
› Average cost of debt 2.25%2, 3
› LTV of 41.8%1 (FY20: 39.2%2) post completion of the Phoenix Park Racecourse acquisition in January 2021
› Company will continue to operate below its target maximum LTV of 45%
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 1Latest Practical Date; 2 As at 31 December 2020; 3Including deferred financing costs on debt and commitment fees on RCF 3
FINANCIAL PERFORMANCE1
Total Property Value Revenue from Investment Properties Dividend paid1
Revenue growth principally driven by
investment in new properties Delivering shareholder value through
stable growing dividends
€74.7m
€1,359m €1,380m +20.4%
+1.6% €62.1m
€50.6m
€921m
Cents per share 5.97
2018 2019 2020 2018 2019 2020
5.8
EPRA NAV EPRA Earnings
EPRA Earnings adjusted for non-recurring
expenses increased 9.8% to €36.3m
€842m 5.6
€811m
+3.9% €34.0m
€33.1m
+2.7%
€620m €27.8m
2018 2019 2020
2018 2019 2020 2018 2019 2020
1 Year ended 31 December
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 4
MARKET OUTLOOK
Strong Growth of Irish Economy Rapid Population Growth Housing Demand Remains Above Supply
10.0% 5.6m 1.5m 40,000
Ireland the only EU
country to grow 5.4m 34k Est. National Annual Demand
8.0% 1.4m 35,000
GDP in 2020
5.2m
New Dwelling Completions
6.0% 1.3m 30,000 Estimated demand still
4.0% 5.0m c. 1.6x supply levels
1.2m 25,000
2.0% 4.8m
0.0% 1.1m 20,000
4.6m
2017 2018 2019 2020 2021f
-2.0% 1.0m 15,000
4.4m
-4.0% 0.9m
4.2m 10,000
-6.0%
4.0m 0.8m 5,000
-8.0% 2010 2015 2020 2025 2030 2035
Ireland Euro area
Ireland Dublin (RHS) 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: European Commission, Winter 2021 GDP Forecasts Source: UN Population Growth Forecasts Source: CSO (Completions Data); Central Bank (Est. Housing Demand)
Strong Employment Levels Youngest Population in Europe (Under 25s) Record Low Rental Stock Available
2500 18% Ireland 33.0% 9,000
2400 16% France 8,000
Rental Stock in Dublin (units)
2300 14% 7,000
2200 UK
12% 6,000
2100 NL
10% 5,000
2000
8% Spain 4,000
1900
6%
1800 Germany 3,000
1700 4%
2,000
1600 2% Italy
1,000
1500 0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
2009 2012 2015 2018 2021 0
2007 2009 2011 2013 2015 2017 2019 2021
Employment ('000) Unemployment Rate % of Population Under 25 Years
Source: CSO, excludes Covid-19 related temporary unemployment Source: Eurostat, UK figures shown for 2019 Source: Daft.ie Rental Price Report, Q4 2020
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 5
SUSTAINABLE ACCRETIVE GROWTH STRATEGY
Acquisition of Development Development
Completed Assets Partnerships of Existing Portfolio
› Continued evaluation of new › Forward purchase/ funding › Opportunity to add c.600 units at
acquisition opportunities in attractive agreements with local builders currently owned properties1
urban locations and developers for new supply of
› Partially completed foundation
multi-family and single-family
› Key criteria: infrastructure (e.g. parking) already in
homes
place at Rockbrook site
› Good transportation links and
community infrastructure
› Sustainable employment
opportunities
› Family-friendly neighbourhoods
Disciplined capital allocation policy to generate value and growing dividends for shareholders
1 As at 31 December 2020, including 61 units currently under construction
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 6
EXECUTION ON GROWTH STRATEGY
PORTFOLIO BUILD-UP FUTURE PIPELINE
57% Portfolio Growth over the period Pipeline for growth of c.18%
ACQUISITION
DISPOSAL
Acquisitions of Acquisitions of 146 Planning permission granted
TOTAL
Waterside, Hansfield units at Phoenix Park › Priorsgate – 31 units
Wood and others and others › Beacon Sq South – 84 units
Acquisitions of › Rockbrook – 428 units
Marathon XVI
Portfolio (815 units)
and others Under construction
› Merrion Road1 – 69 units
› Bakers Yard – 61 units
Acquisitions of
Hampton Wood and
others
Disposal of
151 units
across
10 properties
Under Planning
Construction Permission
Granted
1 Forward purchase, contracted November 2018
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 7
ACQUISITION DEVELOPMENT PARTNERSHIPS DEVELOPMENT EXISTING ASSETS
INVESTMENT: 146 UNITS AT CASTLEKNOCK, DUBLIN 15
M50
Phoenix Park Racecourse, Castleknock, Dublin 15
Purchase Price1 €60 million Gross Initial Yield 5.3%
Year built Phased 2002-2020 Closing date January 2021
Total units 1 bed 20 3 bed 13
146
2 bed 113 4 bed -
Location Western Dublin suburb of Castleknock (6kms to Dublin City Centre),
adjacent to the Phoenix Park, largest enclosed park in any European city
Transport Close to the City Centre, serviced by Ashtown train station and local bus
infrastructure services, and the M50 national motorway network
Local Schools, sporting facilities, shopping and employment, in a sought after and
Amenities mature residential location
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 1 Including VAT but excluding other transaction costs 8
ACQUISITION DEVELOPMENT PARTNERSHIPS DEVELOPMENT EXISTING ASSETS
FORWARD PURCHASE IN PROGRESS: MERRION ROAD, DUBLIN 4
Merrion Road, Dublin 4 M50
Acquisition €47.16m Gross Yield 5.1%2 (Apr-21)
Contract Price1 (Year 1)
5.6% (Nov-18)
Contracted date November 2018 Expected closing date3 H1 2022
Total units 1 bed 12 3 bed 14
69
2 bed 43 4 bed -
Location South Dublin coastal location adjacent to hospitals, embassies and
universities
Transport Close to the City Centre, walking distance to local bus, DART and rail
infrastructure services
April 2021
Local Schools, sporting facilities, parks, shopping, hospitals and employment, in a
Amenities highly desirable seafront location
CGI
1 Including VAT 2
but excluding other transaction costs; Updated to reflect the prevailing market condition; 3 IRES REIT and vendor currently discussing long-stop date extension to end Q2 2022
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 9
ACQUISITION DEVELOPMENT PARTNERSHIPS DEVELOPMENT EXISTING ASSETS
DEVELOPMENT IN PROGRESS: BAKERS YARD, DUBLIN CITY CENTRE
Bakers Yard, North Portland Street, City Centre, Dublin M50
Development Costs €16 million Gross Yield 6.1%1
(Year 1)
Expected Completion2 2022
Total units3 1 bed 19 3 bed -
61
2 bed 42 4 bed -
Location Walking distance to the City Centre, Mater Hospital, Universities, Croke Park
and Financial Services District
Transport Access to Luas, local train and bus services, Port Tunnel and the M50
infrastructure national motorway network
Local Hospitals, schools, sporting facilities, shopping and employment
Amenities May 2021
1 Assumes Part V sold; 2 Subject to change due to Covid-19 restrictions ; 3 Including Part V units
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 10UPDATE ON INVESTMENT MANAGEMENT AGREEMENT
› Announcement released by the Company on 1 April 2021
› Investment management agreement “IMA” due to terminate on 31 March 2022
› The Company can purchase the issued shares of the Investment Manager (IRES Fund Management
Limited) on a liability free/ cash free basis for €1 (“internalisation”)
› Joint workstreams progressing on legal and systems & processes
› Further announcements in relation to the IMA will be made by the Company as and when appropriate
› Augmentation of IRES REIT: Senior appointments of Finance Director, Brian Fagan joined 26 April
2021 and Company Secretary & General Counsel, Anna-Marie Curry joining 1 July 2021
Phoenix Park
Castleknock
Dublin 15
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 112021 SUSTAINABILITY KEY THEMES
Integrate Advance Engage Deliver Set Report
Oversight Competency Stakeholders Transparency Targets & Disclose
Develop and monitor ESG cross- Empower our key stakeholders to Conduct ongoing engagement with Establish necessary frameworks, Identify and monitor the progress of Build standardised, transparent, and
functional policies, objectives and be advocates and enablers of ESG our key stakeholders through platforms and practices to build our United Nations Sustainable comprehensive ESG disclosures
accountability transparency and performance frequent reporting, active investment grade ESG data Development Goals-aligned goals
consultations and programmes
› ESG Steering › Continuously › Undertaking ESG › ESG Assurance › GRESB › Publication of our
Committee in place building on Board Materiality Statement: submission first ESG Report
and Management Assessment with Independent
› Currently formalising › EPRA Sustainability
competencies key stakeholders auditing of our
the Board Best Practices
sustainability
Sustainability › Environmental › Annual resident Recommendations
performance
Committee Management satisfaction survey in reporting
measures in
Performance group
› Employee survey accordance with the › United Nations
set up for 2021
EPRA sBPR and the SDGs alignment
› Investor meetings AA1000AS
and conferences
› Ongoing
development of Click to download:
https://investorrelations.iresreit.ie
company policies /sites/ires-ir/files/reports-
and practices presentation/reports-and-
presentations/ires-esg-15-3-21-
1.pdf
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 12SUPPORTING OUR LOCAL COMMUNITY
As we navigate the Covid-19 pandemic,
the health and wellbeing of our employees,
residents and business partners Community Giving
remains our priority IRES continues to be actively involved
in charitable causes through donations,
sponsorships and online events.
IRES is committed to supporting our communities during
difficult times
In response to the Covid-19 pandemic:
› We paused rent increases on renewals since 1st April 2020
› We put in place payment plans to support commercial tenants
whose trading has been affected
› We provided frontline workers with complimentary car parking
and accommodation in locations across Dublin
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 13CONCLUSION AND OUTLOOK
Irish Multifamily Sector remains attractive…
Favourable population Structural housing Strong Irish Yields on Uncertainties and
demographics supply / demand economic multifamily assets risks exist in the
and trend towards imbalance fundamentals remain attractive near term
smaller households
Business fundamentals remain strong and IRES well positioned
Strong track record & Modern portfolio with Robust balance sheet Established Effective capital
proven execution on strong operating with funding cost operating platform allocation
strategy metrics c.2%
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 14APPENDIX
Time Place
Rockbrook
15
Waterside Phoenix Park Racecourse Elmpark GreenDIVERSE PORTFOLIO IN THE DUBLIN AREA
SUPERIOR
LOCATION
IRES REIT PLC l INVESTOR PRESENTATION l JUNE 2021 16Irish Residential Properties REIT plc
South Dock House
Hanover Quay
DO2 XW94
Ireland
www.investorrelations.iresreit.ie
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