Hibernia REIT : Preliminary results for the year to 31 March 2020

PRELIMINARY RESULTS

For the financial year to 31 March 2020

27 May 2020

Hibernia REIT plc ('Hibernia', the 'Company' or the 'Group') today announces preliminary results for the financial year ended 31 March 2020.

1) Business update & outlook

· 93.5% of commercial rent for quarter ended Jun-20 now received, with 3.5% deferred, 2% due in June and 1% outstanding (same time last quarter 100% collected, same time in prior year 100% collected)

· 97% of residential rent for month of May-20 now received (prior months 99% or above)

· Our managed buildings have remained open and accessible as required throughout the COVID-19 lockdown

· We have prepared our buildings for increasing usage as the lockdown eases with individual building plans covering access control, physical distancing measures, cleaning/sanitising and signage

· 2 Cumberland, our sole active development site, reopened on 18 May: completion now expected by end of 2020

· Mark Pollard, our Director of Development, is retiring at the end of June with Gerard Doherty promoted to the role

· Market outlook negative in near term, with the full impact of the COVID-19 crisis on rental and capital values yet to be felt

2) Highlights for the financial year

Portfolio returns outperformed the market, driven by developments

· Portfolio value of €1,465.2m^[1], up 2.0%^[2] in the financial year and up 1.4%² in H2. On the same basis but excluding the increase in stamp duty, the portfolio value rose 3.5% in the financial year and 2.9% in H2

· Per RICS guidance, the independent valuer has included a material uncertainty statement in its Mar-20 valuation

· 12-month Total Property Return^[3] of 5.9% vs MSCI Ireland Property All Assets Index (excl. Hibernia) of 4.4%

· EPRA NAV per share⁴ of 179.3 cent, up 3.5% in the year (5.3% excl. stamp duty increase) and up 2.0% in H2

Further strong increase in distributable income from growing rent roll and reduced costs

· Annual contracted rent of €65.7m at Mar-20, up 14.1% since Mar-19, and office WAULT of 6.4yrs, down 15%

- Seven new lettings totalling 93,000 sq. ft. added €5.7m (on average 9% ahead of last net ERV)

- Nine rent reviews completed on 99,000 sq. ft. added €2.7m (on average 2% ahead of ERV at review)

- EPRA like-for-like net rental growth⁴ of 3.9%

· EPRA EPS⁴ of 5.5 cent, up 39.9% on last year (2019: 4.0 cent)

· Diluted IFRS EPS of 8.8 cent, down 49.8% on last year due to lower revaluation gains (2019: 17.6 cent)

· Final dividend of 3.0 cent per share, bringing total for the financial year to 4.75 cent, up 35.7% (2019: 3.5 cent)

Good progress made in de-risking our one active development and advancing our pipeline schemes

· 2 Cumberland Place expanded by 13% to 58,000 sq. ft. of offices and 24,000 sq. ft. pre-leased to 3M in Apr-20

· Development pipeline, which comprises seven potential schemes, expanded and progressed

- Office pipeline grew 5% to 566,000 sq. ft. after new planning grants at Harcourt Square and Clanwilliam

- Addition of 6.8 acres of industrial land acquired, expanding mixed-use pipeline by 5% to 154.3 acres

Effective recycling of capital

· Net sales proceeds in FY19 of €60.3m have been reinvested or returned to shareholders

- €23.3m invested in nine acquisitions, seven of which were 'bolt-on' in nature

- €21.3m capital expenditure on developments

- €25.0m share buyback programme completed: 17.6m shares bought and cancelled (avg. price of 142.3 cent)

· Capital reorganisation to improve future flexibility effective Apr-20: €50m moved to distributable reserves

Leverage amongst the lowest in the European REIT universe and no debt maturities until Dec-23

· Net debt of €241.4m, LTV⁴ of 16.5% (2019: €217.1m, LTV⁴ 15.6%)

· Weighted average debt maturity of 4.4 years (2019: 5.4 years)

· Significant covenant headroom at Mar-20: can withstand 65% fall in asset values and 76% fall in underlying EBIT

· Cash and undrawn facilities of €154m, €136m net of committed expenditure (2019: €178m and €143m, respectively)

Kevin Nowlan, Chief Executive Officer of Hibernia, said:

'As Ireland starts to emerge from lockdown, our top priority remains the safety of our staff, tenants and suppliers and we will continue working closely with all our stakeholders.

'Our results for the year to March 2020 were strong, with our portfolio returns outperforming the Irish market, helped by our office developments. In addition, our EPRA earnings per share increased 40% thanks to a combination of rental income growth and cost savings, and we are increasing our full year dividend by over 35%, in line with the requirements of the Irish REIT regime.

'We have also made good progress with our other strategic objectives: our sole active development, 2 Cumberland Place, is now significantly de-risked, our development pipeline has grown thanks to new planning permissions and acquisitions, and we have successfully recycled the proceeds of the net sales we made last year. We are pleased to have appointed a Sustainability Manager to focus on delivering further, measurable improvements to our sustainability performance.

'The full impact of the COVID-19 pandemic on market rents and property values is yet to be felt but we are well positioned to withstand it. We have amongst the lowest leverage in the European REIT universe, no debt maturities until December 2023, and a high-quality tenant base weighted towards the technology sector and state entities. The impact on our rent collection levels to date has been modest and we are working collaboratively with any tenants who are having difficulties. We believe the current crisis is underlining the importance of city centre offices as places for employees to work together and exchange information and ideas and we remain confident in the long-term prospects of the central Dublin office market and the Dublin residential market and will continue to manage the business accordingly.'

Contacts:

Hibernia REIT plc[phone]

Kevin Nowlan, Chief Executive Officer
Tom Edwards-Moss, Chief Financial Officer

Murray Consultants

Doug Keatinge: [phone], [e-mail]
Andrew Smith: [phone], [e-mail]

About Hibernia REIT plc

Hibernia REIT plc is an Irish Real Estate Investment Trust ('REIT'), listed on Euronext Dublin and the London Stock Exchange. Hibernia owns and develops property and specialises in Dublin city centre offices.

A results call will take place at 9.00 a.m. today, 27 May 2020, using the following details:

Ireland dial-in: [phone]
UK dial-in: [phone]
US dial-in: [phone]
All other locations: [phone]
Access code: 17563760#

Disclaimer
This announcement contains forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Group or the industry in which it operates to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements speak only as at the date of this announcement. The Group will not undertake any obligation to release publicly any revision or updates to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise except as required by law or by any appropriate regulatory authority.

Chief Executive Officer's statement

Our key priority in the present COVID-19 crisis remains the health and safety of our staff, occupiers and suppliers and we describe in detail below and elsewhere in this document the actions we are taking in this regard and the impact the crisis is having on our business. With the first case of COVID-19 reported in Ireland in late February 2020 and Ireland's lockdown starting in mid-March 2020, there was little impact on our financial results for the year to 31 March 2020, which reflect the progress we made with our strategic priorities and the favourable market conditions that existed for the majority of the financial year. Given this, I have split my statement below into three distinct parts: the year ended 31 March 2020, our current position, and the outlook.

1) Year ended 31 March 2020

Favourable market conditions

With strong economic growth and foreign direct investment in Ireland driving high levels of occupier and investment demand and with limited new supply, the central Dublin Grade A office vacancy rate continued to be low (5.9% at 31 March 2020), prime headline rents remained in excess of €60psf and prime investment yields also remained around 4.0% (source: Knight Frank). 2019 saw 3.3m sq. ft. of Dublin office take-up, the third highest year on record, and, notwithstanding the impact of COVID-19 towards the end of the quarter, Q1 2020 saw a further 0.8m sq. ft. taken up, the second highest Q1 figure ever recorded (source: Knight Frank). 2019 also saw record investment volumes, with €7.2bn of Irish property transacting (including Green REIT plc) and the office and residential sectors accounting for 77% of volumes. 2020 also started strongly with €0.7bn traded in Q1 (source: Knight Frank) but, unsurprisingly, the outlook for both the investment and occupational markets has weakened since mid-March.

Positive portfolio performance and financial results, helped by developments

The Total Property Return of our portfolio was 5.9%, outperforming our benchmark (the MSCI Ireland All Assets Index excluding Hibernia) which returned 4.4%, and our EPRA NAV per share grew by 3.5% to 179.3 cent. This performance came despite the impact of the 1.5pp increase in stamp duty on commercial property in October 2019, which C&W, our independent valuer, estimates reduced the value of our property portfolio by €22m (1.5%) at 31 March 2020, a 3.2 cent (1.8%) reduction in our EPRA NAV per share. Even ignoring the impact of the stamp duty increase, revaluation gains on our portfolio were lower than in the prior year given the larger amount of development completions we had in the prior year and the yield compression seen, particularly in the residential sector, that year.

Growing rent roll and reduced costs leading to significant increase in distributable income

We had a busy year on the occupational side with new leases and rent reviews agreed adding €7.3m to our contracted rent, net of expiries, breaks, surrenders and adjustments. Acquisitions added a further €0.8m of rent meaning contracted rent grew by €8.1m (+14.1%) to €65.7m and our reported net rental income for the year grew €5.3m (+9.9%) to €58.6m. The WAULT of our in-place office portfolio at 31 March 2020 was 6.4 years, with the WAULT of our completed office developments of 9.1 years being offset by the WAULT of 3.3 years on our acquired office portfolio: approximately 40% of our acquired offices (by rent) are development pipeline assets with a WAULT of 2.0 years. At the same time, our cost structure has reduced materially following the expiry of the IMA in November 2018 and its replacement with a more standard incentive scheme and as a result EPRA earnings for the financial year grew €10.6m (+38.7%) to €38.1m, with EPRA EPS growing 39.9% to 5.5 cent. Diluted IFRS EPS fell 49.8% to 8.8c due to lower revaluation gains on the property portfolio compared to the prior year. The Board has proposed a final dividend of 3.0 cent per share, bringing the dividend for the year to 4.75 cent, up 35.7% on the prior year and representing a pay-out ratio of 86% of EPRA EPS in line with the requirements of the Irish REIT regime.

De-risking current development and progressing pipeline of future schemes

We obtained planning permission for an extra floor at 2 Cumberland Place, our only active development scheme, increasing the new building's lettable area by 13% to 58,000 sq. ft.: by 31 March 2020 the building's frame was very substantially complete, façade works were well advanced and landlord fit-out work had commenced. Practical completion will be later than our previous expectation of Q3 2020 due to the shutdown of all non-essential construction sites from 28 March to 18 May 2020 but, at present, we still expect it to occur in 2020. Further progress occurred in April 2020 with the pre-leasing of 41% of the building to 3M, the science-based technology company. We received provisional grants of planning permission for our redevelopment schemes at Harcourt Square and Clanwilliam Court, increasing the overall space that the four office schemes in our pipeline can deliver by 5.2% to 566,000 sq. ft., and we grew our mixed-use pipeline by 4.6% to 154.3 acres of land through acquisitions. In April 2020 we received a final grant of planning for the revised 337,000 sq. ft. scheme at Harcourt Square.

Effective capital management

The net sales proceeds of €60.3m contracted to be received in the prior year were successfully reinvested. €23.3m was invested in nine acquisitions of property, most of which provide potential synergies with assets already in our portfolio. €21.3m was capital expenditure on developments, primarily 2 Cumberland Place, and €25.0m was spent in acquiring 17.6m of our own shares in an on-market share buyback programme. We received final Court approval in March 2020 for a capital reorganisation to convert €50m of share premium into distributable reserves in order to increase our flexibility for future capital management: this became effective in early April 2020.

2) Current position

Market update

The emergence of COVID-19 has created a lot of uncertainty in both the occupational and investment markets. However, as evidenced by our letting to 3M at 2 Cumberland Place, some leases are progressing, and we understand that c. 150,000 sq. ft. of office space has been leased in Dublin since the COVID-19 restrictions commenced in mid-March. Unsurprisingly, the picture for the rest of 2020 appears less positive than was expected at the start of the year and our own tenant demand tracker (run in conjunction with Cushman & Wakefield) saw a 20% fall in active demand to 2.5m sq. ft. between the end of February and end of April 2020. In the investment market, some transactions, where terms were already agreed (and due diligence completed) prior to lockdown, have proceeded to exchange of contracts and completion, most notably Bishop's Square, D2 for a price of €180m, an implied yield of approximately 4.0%, and we understand another large city centre office transaction is progressing through legal negotiations at a similar yield.

Business update

Since mid-March all our head office staff have been working remotely, supported by our cloud-based IT systems. Throughout the lockdown all our managed buildings have remained accessible by tenants as required. We have been preparing our buildings for greater usage as the lockdown eases and each building has an individual plan for access control, physical distancing measures, additional cleaning and sanitising, and signage which we have been discussing with tenants. Work at 2 Cumberland Place, our only current development site, has now restarted, with appropriate precautionary measures, having been halted between 28 March and 18 May 2020. Mark Pollard, our Director of Development, is retiring at the end of June 2020 and will be succeeded by Gerard Doherty, who joined Hibernia in 2017 and has over 20 years of development and construction experience. Mark will continue to work with us on a part-time basis.

Our tenants are important stakeholders in the Group and we are working closely with them. The majority of our rental income comes from large companies in the technology sector or government/state entities. Where needed, we are assisting our commercial tenants (c. 90% of our rent roll) with their cashflow by allowing them to pay rent on a monthly basis. In addition, where our tenants are suffering particularly severe impacts from the restrictions on movement, we have allowed some deferral of rent. Overall, the impact on our rent collection statistics to date has been modest. 89% of our commercial rent for the quarter ended June 2020 was collected within seven days of due date (2019: 93%), rising to over 93% within 60 days (2019: over 99%): the majority of the rent outstanding is due in June or is deferred. On the residential side, 97% of rent due for the month of May 2020 has been collected at this point compared to recent months at 99% or better.

Low leverage, significant headroom

Our balance sheet affords us significant strategic flexibility: at 31 March 2020 we had net debt of €241.4m and an LTV of 16.5%, making us amongst the lowest-levered European REITs, and at that date we could withstand a reduction in our portfolio value of 65% or a reduction in our underlying earnings of 76% before breaching our key debt covenants. Our weighted average debt maturity is 4.4 years and we have no debt repayable until December 2023. We have €136m of cash and undrawn facilities after committed capital expenditure and our debt is fully unsecured, giving us the widest range of potential funding options should opportunities arise requiring additional funding.

3) Looking ahead

Market outlook negative in the near term; we remain positive about the longer term

The full impact of the COVID-19 pandemic on market rents and property values is yet to be felt but we are well-positioned to withstand it thanks to our experienced team, high-quality portfolio and robust balance sheet. We believe the current health crisis is underlining the importance of city centre offices as places for employees to work together and exchange information and ideas. We remain confident in the long term prospects of the central Dublin office market and the Dublin residential market and will continue to manage the business and our pipeline of developments accordingly.

Kevin Nowlan, Chief Executive Officer

Market review

General economy

For most of the year to 31 March 2020 economic conditions were positive. In 2019 global GDP growth was estimated at 2.9% (source: the IMF) and while some moderation in growth rates was generally expected for the largest developed economies (including China) in 2020, consensus was that the outlook remained benign. As recently as January 2020, forecasts were for global GDP growth of 3.3% in the year (source: the IMF). However, the rapid emergence of the COVID-19 pandemic and the extraordinary precautionary measures governments imposed in response are causing an unprecedented fall in economic activity and a global recession in 2020 now seems inevitable. At the time of writing, the IMF estimates global GDP will decline 3.0% in 2020, making it the first year of contraction since 2009, when global GDP fell 1.7% in the aftermath of the Global Financial Crisis (source: the World Bank). The main concern is that the current restrictions in movement will cause lasting economic damage despite the wide-ranging economic stimuli introduced: in the US, over 40m people have registered for unemployment benefits in the eight weeks to 18 May 2020, exceeding the number of jobs created in the preceding decade of expansion (source: US Employment and Training Administration).

Ireland's economic situation and outlook reflect the global picture: having experienced GDP growth of 5.5%[4]in 2019 (helped by another strong year of foreign investment in Ireland) and initially expected growth of 5.3% in 2020 (source: Goodbody), Irish GDP is now expected to contract by 10.7% in 2020 before returning to growth in 2021 (source: Goodbody). Core domestic demand, our preferred measure of Irish economic activity, is expected to fall 11.7% in 2020 and then grow 6.7% in 2021 (source: Goodbody). Irish unemployment has risen very significantly and in record time: in Q4 2019 the unemployment rate was 4.7%, near historic lows, but it is now around 27%[5]and is expected to recover to approximately 10% by the end of 2021 (source: Goodbody).

Notwithstanding the external risks currently faced, after a decade of fiscal prudence the Irish economy is in a better position to withstand a recession than it was in the run-up to the Global Financial Crisis. While government debt to gross national income ('GNI'), a measure of output that excludes the distorting effect of some of the multinational sector, grew from 28% in 2007 to approximately 98% at the end of 2019, the current account position was in significant surplus in 2019 versus the large deficit that existed in 2007, the domestic banks' capital ratios and liquidity positions are much improved, household debt to disposable income fell from 200% in 2007 to 117% in 2019 and house prices are much lower relative to incomes (source: Goodbody). The composition of the economy has also shifted to one where the more resilient and export-orientated multinational sector makes up a greater share of output and construction is a much smaller part of the economy: the multinational sector accounted for just over 40% of GDP in 2019 vs 20% in 2006 (source: Davy).

Irish property market overview

Just as the Irish economy is in a better position to withstand a downturn than it was in 2007, so the structural changes that have occurred in the property sector since 2007 leave it much better placed to survive more challenging conditions. From 2001 to 2008, 100% of investment spend on Irish property was from domestic investors (source: CBRE). At the peak of the previous cycle in 2006, 36% of investment spend was attributable to developers, 26% to syndicates, 20% to private investors and 10% to institutional buyers, with the remainder attributable to others including investment funds, pension funds and occupiers (source: CBRE). Much of this investment was debt-funded, making it sensitive to fluctuations in value. Since 2013, ownership has shifted towards a more internationally diverse investor base, many of which are institutional investors seeking long term income. Since 2013, €11.4bn has been invested in Dublin offices, with Irish investors accounting for 20% of the spend, US 25%, Europe 19%, UK 15%, REITs 12% and Asian/other 9% (source: Knight Frank). Debt is generally a smaller proportion of the funding mix for both investment property and developments than it was prior to the Global Financial Crisis, and speculative development funding has been limited, resulting in more pre-leasing and overall new building supply more in proportion with occupier demand.

Irish property investment market

In the 12 months to 31 March 2020 the MSCI Ireland Property All Assets Index (the 'Index') delivered a total return of 4.4% excluding Hibernia (March 2019: 7.5%). This included the c. 1.4% negative impact on values of commercial property as a result of the stamp duty increase introduced in October 2019. Over the past year the industrial sector has been the top performer in the Index with a total return of 7.7% followed by the office sector at 6.3% and 'other' - which includes multi-family residential - at 4.2% (March 2019: 12.9%, 8.5% and 7.3%, respectively). Prime office yields have remained broadly constant over the past two years and were at 4.0% as at 31 March 2020 (source: Knight Frank).

After record levels of investment of €7.2bn achieved in 2019 (including Green REIT plc), total investment spend was €0.7bn in Q1 2020 (Q1 2019: €0.5bn) (source: CBRE). The two key sectors that have dominated investment volumes are residential and offices which together accounted for 77% of volumes in 2019, up from 70% in 2018 (source: Knight Frank). As a result of the uncertainty (and in some cases the practicalities of carrying out property inspections) caused by COVID-19, investment activity has slowed significantly. Some transactions where terms were already agreed (and due diligence completed) prior to COVID-19 have proceeded to exchange of contracts, most notably Bishop's Square, D2, for a price of €180m, an implied yield of approximately 4.0%. However, given current economic conditions the risk is to the downside for property values at present.

Top 10 office investment transactions (12 months to March 2020)

Building	Price	Price	Buyer	Buyer nationality
The Green REIT Portfolio	€1,500m	n/a	Henderson Park	UK
The Cedar Portfolio	€530m	n/a	Blackstone	US
5 Hanover Quay, D2	€197m	€1,233psf	Union Investment	Germany
Nova Atria, Sandyford, D18	€165m	€465psf	Mapletree Investments	Singapore
The Reflector, D2	€155m	€1,260psf	Deka	Germany
The Treasury Building, D2	€116m	€923psf	Google	US
Citywest portfolio, D24	€105m	n/a	Henley Bartra	Ireland/UK
La Touche House, D1	€84m	€877psf	AXA IM Real Assets & BCP Capital	France/Ireland
Block 4&5 Harcourt Centre, D2	€54m	€942psf	Arena Invest	Germany
Elm Park, D4	€53m	€624psf	Quadoro Doric	Germany
Top 10 total	€2,959m

Source: Knight Frank.

Office occupational market

Despite a lull in the middle of 2019, overall occupier activity remained strong in the Dublin office market with total take-up of 3.3m sq. ft. in the year making it the third highest year on record (2018: 3.9m sq. ft.) (source: Knight Frank). Large lettings of 100,000 sq. ft. or greater were again prevalent, accounting for 52% of overall take-up in 2019 (2018: 37%), and the average letting size in the year was 17,500 sq. ft., continuing the trend away from its traditional level of around 10,000 sq. ft. (source: Knight Frank). The strong demand continued into 2020 with take-up of 0.8m sq. ft. recorded in Q1 2020, the second strongest opening quarter on record (Q1 2019: 1.4m sq. ft.) (source: Knight Frank). The city centre continued to be the preferred location for office occupiers, accounting for 68% of take-up in 2019 (2018: 72%), though in Q1 2020 this reversed due to the 249,000 sq. ft. letting to Mastercard in South County Business Park in the South suburbs (source: Knight Frank).

Top 10 office lettings (12 months to March 2020)

Tenant	Industry	Building	Area (sq. ft.)	% of total take-up
LinkedIn	TMT	2, 3 & 4 Wilton Park, D2	434k	16%
Mastercard	Financial	1 & 2 South County Business Park, D18	249k	9%
Amazon	TMT	Charlemont Square, D2	170k	6%
Slack	TMT	Fitzwilliam 28, D2	135k	5%
Intercom	TMT	Cadenza, Earlsfort Terrace, D2	113k	4%
Paddy Power	Gambling	Belfield Office Park, Clonskeagh, D4	90k	3%
Guidewire	TMT	Stemple Exchange, D15	85k	3%
Google1	TMT	Block I Central Park, D18	75k	3%
Elavon	TMT	F1 Cherrywood Business Park, D18	68k	2%
Horizon	Pharma	70 St. Stephen's Green, D2	62k	2%
Top 10 total			1,481k	54%

1. Google also leased c.35k sq. ft. of space in other Dublin office buildings during the 12 months to Mar-20

Source: Knight Frank.

In 2019 the technology, media and telecommunications sector continued to account for the majority of space taken up at 55% (2018: 52%) and it also dominated take-up in Q1 2020 at 91% (Q1 2019: 56%). Over the past decade the TMT sector has accounted for 44% of total Dublin office take-up. State bodies accounted for 17% of take-up during 2019 (2018: 7%) while the co-working sector accounted for 3% in 2019 (2018: 13%) (source: Knight Frank). Overall, co-working and serviced office providers occupy approximately 4% of the city centre stock (excl. period properties), up from 3% at March 2019 (source: Knight Frank). This is similar to other international cities such as London, Paris and New York (Manhattan) at 6%, 3% and 4%, respectively (source: Knight Frank).

The vast majority of the lettings included in the Q1 2020 statistics were signed prior to the COVID-19 pandemic and the disruption it has caused. Unsurprisingly, despite there being more than 0.9m sq. ft. of space reserved at the end of Q1 2020 (source: CBRE), there is considerable uncertainty around the demand outlook for the rest of 2020. Our demand tracker, run in conjunction with C&W, saw a 20% fall in active demand between the end of February and the end of April 2020 to a figure of 2.5m sq. ft. (March 2019: 4.2m sq. ft.) as businesses started to defer decisions.

The overall Dublin office vacancy rate (which includes 'shadow' or 'grey' space) fell to 6.5% at March 2020 from 7.0% at the end of Q4 2019 (March 2019: 5.4%) and the Grade A vacancy rate in the city centre, where all of Hibernia's office portfolio is located, was 5.9% at March 2020, down from 6.4% the previous quarter (March 2019: 4.5%) (source: Knight Frank). These low rates of vacancy will support the Dublin office market over the coming quarters if transactional activity declines as anticipated (source: CBRE) but nonetheless vacancy rates are likely to rise as un-let space is delivered. Prime city centre rents remained stable in the €62.50-65psf range as at March 2020 (source: JLL, Knight Frank, CBRE) and there has been limited letting evidence seen since, though the risks are clearly to the downside in the current economic environment.

Office development pipeline

The table below sets out our expectation for upcoming supply in Dublin's city centre and for the whole of Dublin by calendar year. We currently expect 7.6m sq. ft. of gross new space to be delivered between 2020 and 2023 for the whole of Dublin, of which 67% will be in the city centre. 43% of office stock under construction in Dublin (45% in the city centre) has been let or reserved, meaning there is 3.1m sq. ft. under construction but not yet let (1.9m sq. ft. in the city centre) (source: Knight Frank/Hibernia).

Year	Dublin city centre supply	All Dublin supply
2020f	1.2m sq. ft. (39% pre-let)	2.0m sq. ft. (34% pre-let)
2021f	1.8m sq. ft. (57% pre-let)	2.7m sq. ft. (62% pre-let)
2022f	0.8m sq. ft. (15% pre-let)	1.2m sq. ft. (18% pre-let)
2023f	1.3m sq. ft. (29% pre-let)	1.7m sq. ft. (21% pre-let)
Total 2020-23	5.1m sq. ft. (39% pre-let)	7.6m sq. ft. (39% pre-let)

Source: Knight Frank/Hibernia.

The uncertainty caused by COVID-19 is likely to make securing project-specific debt funding for speculative office development even more challenging than it has been in recent years and as a result, as 2020 progresses, we may see some supply being delayed or postponed: at present construction has yet to commence for any of the forecast supply 2023 in the table above.

Residential sector

Housing delivery continued to increase in 2019, with over 21,000 new homes delivered nationally (up from 18,000 in 2018) and 33% of these completions were delivered in the Dublin area (2018: 38%) (source: the CSO). When combined with the commuter counties around Dublin, the Greater Dublin Area ('GDA') accounted for 55% of completions in 2019 (57% in 2018) (source: the CSO). Growth in housing completions was already slowing prior to the arrival of COVID-19: 4,500 units were completed in Q1 2020, a 6% increase in completions over Q1 2019, the lowest year-on-year increase since 2013 (source: Goodbody). March 2020 saw the sharpest fall in construction activity since 2009 as the impact of the crisis began to be felt and the overall completion figures for 2020 are likely to be negatively affected, given site closures and general business interruption, with the Central Bank of Ireland estimating a drop of 25% in supply this year. Regardless of the impact of COVID-19, the 21,000 housing completions in 2019 was still well below the natural demographic demand for at least 35,000 units per annum.

Despite the Ireland 2040 policy papers' aspirations for compact urban growth there continues to be a surge in housebuilding in the commuter belt, up 36% in 2019, while completions in Dublin grew by just 2%, the lowest rate of growth in the country. Although apartment completions did grow rapidly in 2019 (up 60%), apartments continue to represent the lowest percentage of new housing delivery of any EU member state: the 3,600 apartments completed in 2019 represent just 17% of total completions, relative to an EU average of 59% (source: the CSO). In addition, due to the undersupply of housing, particularly within Dublin, and viability/affordability issues, Goodbody estimates that 80% of the apartments delivered are being purchased by Private Rental Sector ('PRS') investors and the ongoing delivery of apartments is likely to depend on continued demand from PRS investors.

The outlook for the Irish housing market will depend on how the current COVID-19 crisis evolves and the impact on the economy. Residential property prices increased by 1.1% nationally in the year to February 2020 (year to February 2019: 4.3%). In Dublin, residential property prices decreased by 0.1% in the year to February 2020 (source: the CSO). While transaction volumes in the residential sector are likely to be muted in the near term, institutional appetite for multi-family product is expected to remain strong as investors seek yield, with the sector widely seen as more defensive than some other property classes: the persistent undersupply of housing in Ireland only enhances these defensive characteristics (source: CBRE).

Business review

Operations

Since mid-March our head office staff have been working remotely, supported by our cloud-based IT systems. Throughout the lockdown all our managed buildings have remained accessible by tenants as required. We have been preparing our buildings for greater usage as the lockdown eases and each building has an individual plan, which we have been discussing with tenants, covering access control, physical distancing measures, additional cleaning and sanitising and signage. Construction has recommenced at 2 Cumberland Place, our only current development site, with appropriate precautionary measures, having been shut between 28 March and 18 May 2020.

Disposals and acquisitions

It has been a less active year with no disposals made (2019: €100.3m) and only €23.3m invested in nine smaller acquisitions (2019: €40.0m), many of which are adjacent to existing Hibernia assets and were 'bolt-on' in nature. We continue to assess opportunities though we will remain disciplined in pursuing these, particularly given the current economic conditions and outlook.

Acquisitions

· Malahide Road Industrial Park, D17:the property, which was acquired in July 2019 for €7.8m (including transaction costs) comprises 66,000 sq. ft. of warehousing and 17,000 sq. ft. of ancillary office accommodation on a 3.8 acre site. The property is occupied by Bunzl Irish Merchants on a short-term lease and is generating rent of €0.4m per annum. In the longer term we believe it has potential for mixed-use development (see further details in the developments and refurbishments section below).

· Dublin Industrial Estate, D11:some additional industrial units were acquired in the year for a total of €5.6m (including transaction costs). In total these have increased Hibernia's holding in Dublin Industrial Estate to 6.8 acres, with rent of €0.8m per annum at 31 March 2020. In the longer term we believe the property we hold has potential for mixed-use development (see further details in the developments and refurbishments section below).

· Other:during the period €9.9m was spent on five small acquisitions, most of which provide potential synergies with properties already owned by Hibernia.

Portfolio overview

As at 31 March 2020 the property portfolio consisted of 36 investment properties valued at €1,465.2m (March 2019: 32 investment properties valued at €1,395.4m), which can be categorised as follows:

	Value as at March 2020* (all assets)	% of portfolio	Equivalent yield1	Passing rent	Contracted rent	ERV
1. Dublin CBD offices
Traditional Core	€435m	30%	5.0%2	€23.4m	€23.4m	€24.4m
IFSC	€205m	14%	4.7%	€8.3m	€8.3m	€11.3m
South Docks	€557m3	38%	4.4%	€22.3m	€26.0m	€27.7m
Total Dublin CBD offices	€1,197m	82%	4.7%2	€54.0m	€57.7m	€63.4m
2. Dublin CBD office development4	€48m	3%	-	-	-	€3.3m
3. Dublin residential5	€159m6	11%	4.0%7	€6.1m7	€6.1m7	€6.7m7
4. Industrial/ land	€61m	4%	2.8%8	€1.6m	€1.9m	€1.9m
Total	€1,465m	100%	4.5%2,7,8	€61.8m7	€65.7m7	€75.3m7

1. Yields on unsmoothed values and excluding the adjustment for 1WML owner-occupied space.

2. Harcourt Square, Clanwilliam Court and Marine House yields are calculated as the passing rent over the total value (after costs) which includes residual land value. Excludes Iconic Offices in Clanwilliam Court.

3. Excludes the value of space now occupied by Hibernia in 1WML.

4. 2 Cumberland Place.

5. Includes 1WML residential element (Hanover Mills).

6. Net yield assuming 80% net-to-gross and purchaser costs as per C&W at Mar-20.

7. Residential income on net basis assuming Hibernia cost.

8. Current rental value assumed as ERV as these assets are valued using a combination of price per acre and on an income basis.

Note: differences in summation of totals in above table are due to rounding.

*Note: In the Mar-20 valuation C&W included a material uncertainty clause, in line with RICS guidance. This is intended to indicate that less certainty and a higher degree of caution should be ascribed to the valuations than would normally be the case due to the impact of COVID-19.

The key statistics for the office element of our portfolio, which comprised 82% by value and 88% by contracted rent at 31 March 2020 (March 2019: 85% and 88%, respectively), are set out below: contracted rent from developments we have completed comfortably exceeds that from the offices we acquired with income.

	Contracted rent	ERV	WAULT to review1	WAULT to break/expiry	% of rent upwards only	% of next rent review cap & collar	% of rent MTM2 at next lease event
Acquired in-place office portfolio Development pipeline assets Investment assets	€26.4m (€47psf) €11.1m (€42psf) €15.3m (€51psf)	€27.1m (€48psf) €11.1m (€42psf) €15.9m (€53psf)	2.2yrs 1.9yrs 2.5yrs	3.3yrs 2.0yrs 4.3yrs	16% - 28%	- - -	84% 100% 72%
Completed office developments3	€31.3m (€54psf)	€31.7m (€55psf)	2.9yrs	9.1yrs	-	29%	71%
Whole in-place office portfolio	€57.7m (€50psf)	€58.8m (€51psf)	2.6yrs	6.4yrs	8%	16%	77%
Vacant in-place office	-	€4.6m4 (€49psf)	-	-	-	-	-
Committed office-unlet5	-	€3.3m6 (€57psf)	-	-	-	-	-
Whole in-place office portfolio (after vacancy)	-	€66.7m (€52psf)	-	-	-	-	-

1. To earlier of review or expiry.

2. Mark-to-market.

3. 1 Cumberland Place, SOBO Works, 1&2DC, 1WML, 2WML, 1SJRQ.

4. Includes approx. €150k of retail in office buildings.

5. 2 Cumberland Place.

6. In Apr-20 3M signed a pre-lease in 2 Cumberland Place, increasing contracted office rent to €59.2m.

Since 31 March 2019 we have, consistent with our strategic priority of increasing rental income, added €8.1m to Group contracted rent, principally through leasing activity and the completion of outstanding rent reviews. The in-place office portfolio vacancy rate was 7% by lettable area at 31 March 2020 (March 2019: 12%). For further details on the vacant space and the increase in contracted rent, please refer to the asset management section below.

At 31 March 2020 our 'top 10' tenants, most of which are large, multinational companies or government/state entities, accounted for 64% of our contracted office rent of €57.7m and 56% of our contracted portfolio rent of €65.7m. By sector, TMT and government/state entities accounted for 74% of contracted office rent and 65% of contracted portfolio rent (please see the selected portfolio information on pages 20 to 21). The composition of our tenant base, in particular the amount of large, well-capitalised technology companies and government/state entities gives us some comfort regarding its resilience and as noted elsewhere in this document, to date rent collection has remained strong.

Portfolio performance

In the 12 months ended 31 March 2020 the portfolio value increased €28.1m, or 2.0% on a like-for-like basis (i.e. excluding acquisitions, disposals and capital expenditure). The 1.5pp increase in stamp duty, which took effect from October 2019, reduced the portfolio value at 31 March 2020 by an estimated €22m and without this the like-for-like increase in portfolio value would have been 3.5%. In the 12 months ended 31 March 2019 the portfolio value increased by €99.0m, or 7.9% on a like-for-like basis, helped by the completion of two major development projects and some yield compression in the residential market.

	Value at March 2019 (all assets)	Capex	Acquisitions 1	Revaluation	Stamp duty impact	Value at March 2020* (all assets)	L-f-L change
1. Dublin CBD offices
Traditional core	€444m	€2m	€2m	(€2m)	(€11)m	€435m	(€13m)	(2.6%)
IFSC	€207m	-	-	€1m	(€3m)	€205m	(€1m)	(0.6%)
South Docks	€522m2	€8m	€7m	€27m	(€8m)	€557m3	€21m2,3	3.9%2,3
Total Dublin CBD offices	€1,173m	€10m	€9m	€26m	(€21m)	€1,197m3	€7m2,3	0.7%2,3
2. Dublin CBD office development	€16m	€14m	-	€19m	(€1m)	€48m	€18m	61.3%
3. Dublin residential	€153m	€1m	€1m	€5m	-	€159m	€5m	3.2%
4. Industrial/land	€53m	-	€13m	(€6m)	-	€61m	(€3m)	(4.9%)
Total	€1,395m	€25m	€23m	€44m	(€22m)	€1,465m3	€28m2,3	2.0%2,3

1. Including acquisition costs.

2. Excludes the value of space that was occupied by Hibernia in SDH.

3. Excludes the value of space occupied by Hibernia in 1WML.

*Note: In the Mar-20 valuation C&W included a material uncertainty clause, in line with RICS guidance. This is intended to indicate that less certainty and a higher degree of caution should be ascribed to the valuations than would normally be the case due to the impact of COVID-19.

The key individual valuation movements in the financial year (including the impact of the increase in stamp duty) were:

· 2 Cumberland Place, D2:€18.2m/61% uplift as a result of a change from a residual to an investment valuation methodology as the development is nearing practical completion and as progress has been made on leasing (with 3M executing an agreement for lease shortly after year end). The uplift was also due to the addition of a sixth floor, increasing the size of the development by 7,000 sq. ft., growth in the headline office market rent from €54.61psf to €58.06psf and yield compression on the office space from 4.75% to between 4.40% and 4.50%.

· 2WML, South Docks: €10.0m/16% uplift driven by two new leases agreed at rents well ahead of ERV resulting in the property being fully let at year end. The headline market rent across the office space increased from €55.19psf to €57.08psf and the equivalent yield compressed from 4.86% to 4.33%.

· Observatory, South Docks:€5.3m/6% uplift driven by the new licence agreement with N3 (8,000 sq. ft.) at a rent ahead of ERV and settlement of a rent review in line with ERV on 36,000 sq. ft. of space. In addition, a new lease on the fifth floor (6,000 sq. ft.) was agreed with an existing occupier at a rent ahead of ERV. The headline market rent across the office space increased from €55.06psf to €56.07psf and the equivalent yield compressed from 4.88% to 4.73%.

· 1WML, South Docks:€4.4m/3% uplift as a result of the headline market rent on the office space increasing from €56.13psf to €58.06psf. The equivalent yield compressed during the period from 4.22% to 4.16%.

· Blocks 1, 2 & 5 Clanwilliam Court, D2:-€7.9m/-14% movement due to a reduction in the value of current contracted income as the unexpired term decreases, higher capital expenditure estimates for the development due to cost inflation and a 2% reduction in the assumed gross development value ('GDV'). The impact of the increase in stamp duty has a larger impact for developments and this accounted for 27% of the decrease in value.

· Marine House, D2:-€5.4m/-18% movement due to a reduction in the value of current contracted income as the unexpired term reduces, higher capital expenditure estimates for the development due to design improvements and cost inflation; and a 3% reduction in GDV. The impact of the increase in stamp duty is magnified in developments and this accounted for 17% of the decrease in value.

· Newlands, D22:-€2.8m/-8%movement due to a reduction in the land value per acre

Developments and refurbishments

Capital expenditure on developments in the year amounted to €21.3m (2019: €44.8m). No schemes were completed and 2 Cumberland Place remains under construction though work on site was temporarily halted between 28 March and 18 May 2020 due to COVID-19 restrictions and as a result expected completion has shifted to late 2020. The pipeline of future schemes was advanced and expanded by new grants of planning and acquisitions. Mark Pollard, our Director of Development, is retiring at the end of June 2020 and will be succeeded by Gerard Doherty, who joined Hibernia in 2017 and has over 20 years of development and construction experience. Mark will continue to work with us on a part-time basis.

Committed development schemes

At 2 Cumberland Place, D2, construction progressed well in the year and we obtained planning permission for an extra floor, adding 7,000 sq. ft. of office space and taking the overall building to 58,000 sq. ft. of Grade A office accommodation. At 31 March 2020 the frame was very substantially complete, façade works were well advanced and landlord fit-out work had commenced. Due to the Irish Government's decision to suspend all non-essential construction activity because of COVID-19, work on site was temporarily halted from 28 March until 18 May 2020. As a result practical completion will be later than Q3 2020: our current expectation, assuming work is able to continue uninterrupted, is that practical completion will occur in late 2020. In April 2020 we agreed to lease 24,000 sq. ft. to 3M Digital Science Community Ltd, a subsidiary of 3M Company, on a 10-year lease on terms ahead of the September 2019 ERV.

Please see further details on the scheme below:

	Total area post completion (sq. ft.)	Full purchase price	Est. capex	Capex to complete	Est. total cost (incl. land)	ERV1	Office ERV1	Expected practical completion ('PC') date
2 Cumberland Place, D2	58k office2	€0m3	€35m	€16m4	€605psf5	€3.3m	€56.53psf	Q4 2020
	1k retail/café
Total committed	58k office2	€0m3	€35m	€16m4	€605psf5	€3.3m	€56.53psf
	1k retail/café

1. Per C&W valuation at Mar-20.

2. At Mar-20 none of the building was let. In Apr-20, 24,000 sq. ft. was pre-let to 3M on a 10-year lease, taking the office accommodation to 41% let.

3. The site forms part of Cumberland Place and at the time of acquisition of Cumberland House no value was ascribed to it.

4. Future capitalised interest cost until completion is estimated to be €0.2m.

5. Office demise only.

Development pipeline

The office pipeline has grown by 5% (28,000 sq. ft.) since March 2019 due to new grants of planning and now has the potential to deliver up to 566,000 sq. ft. of Grade A office space upon completion, a net increase of 288,000 sq. ft. over the areas in the existing buildings. The majority of this will be in two clusters of office buildings in Dublin's traditional core (Dublin 2); Clanwilliam Court (incl. Marine House) and Harcourt Square. In the year we received a provisional grant of planning for the 152,000 sq. ft. redevelopment scheme at Clanwilliam Court, though this remains subject to appeal. We also received a provisional grant of planning to expand our planned scheme at Harcourt Square by 28,000 sq. ft. to 337,000 sq. ft. (343,000 sq. ft. including reception areas), with the final grant of planning received in April 2020.

Based on the current planning approvals we have for Clanwilliam Court (incl. Marine House) and Harcourt Square, the valuations of these properties at 31 March 2020, which include the present value of the income remaining on the leases, equate to aggregate capital values of €319[6]per buildable foot and the estimated capital expenditure required to deliver the schemes is €550 per buildable foot, an all-in cost of c. €870 per buildable foot[7].

The quantity of land owned with potential for mixed-use development schemes in the longer term increased to 154.3 acres (2019: 147.5 acres) with the acquisition of an additional 6.8 acres of industrial sites in Dublin Industrial Estate, D11, and Malahide Road Industrial Park, D17. Re-zoning will be necessary in all cases and consequently the timing of any future developments remains uncertain at present.

Office	Sector	Current area	Area post completion	Full purchase price1	Comments
		(sq. ft.)	(sq. ft.)
Marine House	Office	41k	49k	€30m	· Planning granted for 49k sq. ft. refurbishment/extension
					· Lower ground floor application may add approx. 1.5k sq. ft.
					· Flexibility to obtain vacant possession during 2020
Blocks 1, 2 & 5 Clanwilliam Court	Office	93k	141k office 11k ancillary	€59m	· Redevelopment opportunity post 2021
					· Potential to add significantly to existing NIA across all three blocks and create an office cluster similar to Windmill Quarter (with Marine House)
					· Provisional planning received for 152k sq. ft. redevelopment - subject to appeal
Harcourt Square	Office	122k	337k office	€77m	· Leased to OPW until Dec-22
					· Site offers potential to create cluster of office buildings with shared facilities or a major HQ
					· Planning granted for 337k sq. ft of offices (343k including reception), +9% over previous planning
One Earlsfort Terrace	Office	22k	28k	€20m	· Current planning permission for two extra floors (6k sq. ft.), expiring Jul-21
					· Potential for redevelopment as part of wider Earlsfort Centre scheme
Total office & ancillary		278k	566k	€186m	· Total area post completion +5% since Mar-19
Mixed-use
Newlands (Gateway)	Logistics/ land	143.7 acres	n/a	€48m2	· Strategic transport location
					· Potential for future mixed-use redevelopment subject to re-zoning
Dublin Industrial Estate	Logistics	119k on 6.8 acres	n/a	€11m	· Strategic transport location · Potential for future mixed-use development subject to re-zoning
Malahide Road Industrial Park	Logistics	66k warehouse & 17k office on 3.8 acres	n/a	€8m	· Potential for future mixed-use development subject to re-zoning
Total mixed-use		154.3 acres	n/a	€67m	· Total land area +5% since Mar-19

1. Including transaction costs and capex spent to date.2. Initial consideration.

Asset management

Net capital expenditure on maintenance items amounted to €0.8m in the financial year or €0.4m net of a refund (2019: €1.8m). Contracted rent increased by 14.1% to €65.7m (March 2019: €57.6m) as a result of:

· New lettings/licence agreements and variations to existing leases adding €6.3m

· Rent reviews concluded adding €2.7m

· Acquisitions adding €0.8m

· Lease expiries, breaks, surrenders and adjustments reducing contracted rent by €1.7m

Some other key statistics at 31 March 2020:

· The vacancy rate in the in-place office portfolio was 7% based on lettable area (March 2019: 12%), and this available space has an ERV of €4.0m (March 2019: €8.0m)

· Average rent across the in-place office portfolio was €50psf (March 2019: €47psf)

· Two office rent reviews were active over 30,000 sq. ft. of office space, with a modest (<€1m) uplift in contracted rent expected (March 2019: nine rent reviews active over 86,000 sq. ft. with a €2.1m uplift expected)

· Please see page 16 in the Financial review for rent collection statistics

Summary of letting activity in the financial year

Offices:

· Five new lettings and one licence agreement on 91,000 sq. ft., adding gross rent of €5.7m per annum, or €4.3m per annum net of expiries, breaks, surrenders and adjustments on let or licensed space. The weighted average periods to break and expiry for the new agreements were 6.0 years and 11.9 years, respectively

· Nine rent reviews concluded over 99,000 sq. ft., adding a further €2.7m of rent per annum: in aggregate the revised rents were approximately 96% above the previous contracted rents and 2% ahead of the ERV at the date of review

Retail:

· One new letting of 2,000 sq. ft. at an initial rent of €0.1m per annum

Residential:

· Letting activity and lease renewals on our 331 residential units added incremental net annual rent of €0.2m in the financial year

· All let units are subject to the rental cap regulations

Summary of letting activity since financial year end

Offices:

· One pre-let on 24,000 sq. ft., generating €1.5m per annum of new rent. The period to expiry for the new lease is 10 years

Key asset management transactions by property

· 2WML, South Docks: all 60,000 sq. ft. of office accommodation in the building was let to Udemy and Zalando in the financial year, at rents well ahead of the prevailing ERVs. The weighted average term of the leases was 12.8 years and the term certain was 6.1 years

· 2 Cumberland Place, D2:the 58,000 sq. ft. building remains under construction (see further details above). In April 2020 we agreed to lease 24,000 sq. ft. to 3M Digital Science Community Ltd, a subsidiary of 3M Company, on a 10 year lease on terms ahead of the September 2019 ERV

· Cannon Place, D4: following the completion of necessary remedial works in the financial year the 16 units were furnished and are now being re-let. As at 31 March 2020 four units were let. The remaining units are occupied on a temporary, pro bono basis by healthcare staff assisting with the COVID-19 crisis

· Hardwicke House & Montague House, D2: six of the seven rent reviews outstanding in the buildings at 31 March 2019 were settled in the financial year. The reviews covered 58,000 sq. ft. and resulted in an aggregate €1.6m increase (+97%) in the passing rent to €3.3m per annum. Two rent reviews over 30,000 sq. ft. are outstanding

· The Observatory, South Docks: we completed two lettings on 14,000 sq. ft. and one rent review on 36,000 sq. ft., adding a net €1.6m to our contracted rent. The weighted average term of the new agreements was 4.6 years and the term certain was 3.8 years

· South Dock House, South Docks: all 9,500 sq. ft. of the property, part of which was occupied by Guggenheim and part of which served as the Hibernia head office, was let to Irish Residential Properties REIT plc on a lease with term certain of 10 years, which commenced in December 2019. The Hibernia head office has moved to the ground floor suite in 1WML

· Flexible workspace arrangement: the flexible workspace arrangement with Iconic Offices in 21,000 sq. ft. of Block 1, Clanwilliam Court performed well in the year. 99% of workstations were occupied at 31 March 2020 (c. 90% of revenue from the arrangement) and 76% of the available co-working memberships were contracted at the same date. At 30 April 2020 96% of workstations were occupied and 65% of the co-working memberships were contracted.

Key in-place office properties with vacancy at year end

As noted above, the in-place office portfolio vacancy rate reduced from 12% at 31 March 2019 to 7% at 31 March 2020 as a result of letting activity in the year. The main office investment assets with vacancy are:

· Central Quay, South Docks: 25,500 sq. ft. of office accommodation is available to lease

· The Forum, IFSC: all 47,000 sq. ft. of office accommodation and 50 car parking spaces are available to lease

· Other:11,000 sq. ft. of available space

Sustainability

As set out in the Sustainability Report we publish each June (see www.hiberniareit.com/sustainabilityfor more details), we are making good progress in improving our sustainability performance. In the 12 months to 31 December 2019 we achieved reductions of 13% for both like-for-like energy consumption (gas and electricity) and greenhouse gas emissions (Scope 1 and Scope 2 emissions) from the areas under our control in our offices. Since 2016, we have achieved a reduction of over 25% in greenhouse gas emissions intensity from landlord-obtained utilities in our offices on a like-for-like basis and a reduction of over 20% on an absolute basis. In the financial year we received our second successive EPRA Gold Award for the quality of our sustainability performance disclosures and we received three stars in the GRESB 2019 Assessment, improving our score by 17 percentage points over prior year to 75%.

Reflecting the increasing importance of sustainability and to ensure we continue to improve in all aspects of our sustainability performance we created a full-time Sustainability Manager position and recruited Neil Menzies to the role in January 2020. Some specific areas of focus for us include:

· Improving the speed and scope of our sustainability data collection to allow us to drive further efficiencies in the operation of our assets

· Integrating climate change measures by moving the portfolio towards net zero carbon emissions and considering science-based sustainability targets

Financial review

As at		31 March 2020	31 March 2019	Movement
IFRS NAVPS		179.8c	174.7c	+2.9%
EPRA NAVPS1		179.3c	173.3c	+3.5%
Net debt1		€241.4m	€217.1m	+11.2%
Group LTV1		16.5%	15.6%	+0.9pp
Financial period ended		31 March 2020	31 March 2019	Movement
Profit after tax		€61.0m	€123.5m	-50.6%
EPRA earnings1		€38.1m	€27.5m	+38.7%
Diluted IFRS EPS		8.8c	17.6c	-49.8%
EPRA EPS1		5.5c	4.0c	+39.9%
Proposed final DPS1		3.0c	2.0c	+50.0%
FY20 DPS1		4.75c	3.5c	+35.7%

1. An alternative performance measure ('APM'). The Group uses a number of such financial measures to describe its performance, which are not defined under IFRS and which are therefore considered APMs. In particular, measures defined by EPRA are an important way for investors to compare similar real estate companies. For further information see Supplementary Information at the end of this report.

The key drivers of the 6.0 cent increase in EPRA NAV per share from 31 March 2019, were:

· 6.5 cent per share from the revaluation of the property portfolio, including 2.7 cent per share in relation to developments

· 5.5 cent per share from EPRA earnings

· Other items, primarily the share buy-back, increased NAV by 1.0 cent per share

· Payment of the FY19 final and FY20 interim dividends, which reduced NAV by 3.8 cent per share

· The 1.5pp increase in commercial stamp duty, which reduced portfolio value and NAV by 3.2 cent per share

EPRA earnings were €38.1m, up 38.7% compared with the prior year as a result of:

· A €5.3m increase in net rental income (+9.9%) to €58.6m (2019: €53.3m), principally due to the commencement of the office lease in 1SRJQ in June 2019 and the successful completion of a number of new lettings and rent reviews. This increase came despite the sale of two assets in the prior year and the cessation of the office lease in the Forum in March 2019

· A €5.9m reduction in operating expenses (-30.6%) to €13.4m (2019: €19.3m) mainly due to the expiry of the Investment Management Agreement in November 2018 and its replacement with a new, lower-cost remuneration scheme.

Profit after tax was €61.0m, a reduction of 50.6% over last year, primarily because of higher revaluation gains in the prior year and due to the stamp duty increase in October 2019 which reduced portfolio value by an estimated €22m in the year. The prior year saw the delivery of our major development projects at 1SJRQ and 2WML and also saw significant yield compression within the residential sector.

Funding position

Group leverage target:our through-cycle target remains a loan to value ratio of 20-30%.

The Group's debt funding is fully unsecured and comprises a revolving credit facility ('RCF') and private placement notes. The weighted average maturity of the Group's debt at 31 March 2020 was 4.4 years (2019: 5.4 years) and no repayments are due before December 2023. Please see the table below for further details.

Instrument	Quantum	Maturity date	Interest cost	Security
Revolving credit facility (five year)	€320m	December 2023	2.0% over EURIBOR on drawn funds 0.8% undrawn comm't fee (fixed)	Unsecured
Private placement notes (seven year)	€37.5m	January 2026	2.36% coupon (fixed)	Unsecured
Private placement notes (ten year)	€37.5m	January 2029	2.69% coupon (fixed)	Unsecured
Total	€395m	n/a	n/a	n/a

At 31 March 2020, net debt was €241.4m (2019: €217.1m), equating to an LTV of 16.5% (2019: 15.6%). The main capital expenditure items increasing the net debt in the financial year were development expenditure of €21.3m, gross acquisition expenditure of €23.3m and the share buyback of €25.0m (see further details on each of these on pages 12, 8 and 16 of this report), which were partly offset by the receipt of €35.2m from the sale of 77 SJRQ, which was agreed in the prior year. Cash and undrawn facilities at 31 March 2020 amounted to €154m or €136m, net of committed expenditure (2019: €178m and €143m, respectively). Assuming full investment of the available facilities in property, the LTV, based on market values at 31 March 2020, would be c. 25%.

The Group has significant headroom on the financial covenants on its borrowings: the table below outlines the principal financial covenants and the headroom above each as at 31 March 2020. Nonetheless, given the potential financial impact of COVID-19 on our business and our markets, we are seeking to preserve capital wherever possible. We have also increased the minimum cash balance we maintain at all times to €20m for liquidity reasons.

Key covenant	Calculation	Requirement	At 31 March 2020	Headroom to covenant limit
Loan to value	Gross debt / (portfolio value + cash)	<50%>	17.5%1	Portfolio value would have to fall 65% before breach
Interest cover ratio	Underlying EBIT / total finance costs	>1.5x	6.3x2	Underlying EBIT would have to fall 76% before breach
Net worth	Net Asset Value	>€400m	€1,231m	Net Asset Value would have to fall 68% before breach

1. Please note, reported LTV is calculated as net debt/portfolio value, giving 16.5%.

2. Based on 12 month historic interest cover.

Interest rate hedging

Group hedging policy: to ensure the majority of the interest rate risk on drawn debt balances is fixed or hedged.

At 31 March 2020 the Group had €75m of fixed coupon private placement notes and the interest rate risk on the RCF drawings of €187m was mitigated by hedging instruments covering €125m of notional exposure as set out below. This means 67% of the interest rate risk on the RCF drawings was hedged and 76% of the Group's overall interest rate risk on its debt was fixed or hedged.

Instrument	Notional	Strike rate	Exercise date	Effective date	Termination date
Cap	€125m	0.75%	n/a	February 2019	December 2021
Swaption	€125m	0.75%	December 2021	December 2021	December 2023

Capital management

In November 2019 we completed a €25m on-market share buyback programme, having repurchased and cancelled a total of 17.6m shares at an average price of €1.42 per share, well below the prevailing EPRA NAV per share. The buyback programme was launched in April 2019 to return the majority of the proceeds of €35m from the sale of 77 SJRQ to shareholders.

In March 2020 we received final Court approval for a capital reorganisation to convert €50m of share premium into distributable reserves in order to increase our flexibility for future capital management following approval from shareholders to do so at the AGM in July 2019. As at 31 March 2020 our share premium account had a balance of €630.3m and we had distributable reserves of €35.5m. The capital reorganisation was effective as of 9 April 2020. Given current economic conditions we have no plans to return further capital to shareholders at present.

Rent collection

Our tenants are important stakeholders in our business and we have been working closely with them to offer support, where needed, through the current COVID-19 crisis.

Commercial tenants

We are assisting our commercial tenants (c. 90% of our rent roll) with their cash flow by allowing them, where needed, to pay rent on a monthly basis. In addition, where our tenants are suffering particularly severe negative impacts from the restrictions on movement, we have allowed some deferral of rent. Overall, the impact on our rent collection statistics to date has been modest, as set out below:

Rent collected	Quarter ending June 20	Quarter ending March 20	Quarter ending June 19
Within seven days	89%	93%	92%
Within 14 days	89%	94%	97%
Within 30 days	90%	98%	97%
Within 60 days	93.5%	99.5%	99.5%
More than 60 days	n/a	100%	100%
Monthly rent	2%	-	-
Deferred rent	3.5%	-	-
Rent outstanding	1%	-	-

Residential tenants

Where requested we are also assisting those residential tenants who are in difficulty. Again, the overall impact on our residential rent collection statistics to date has been modest with 97% of the rent due for the month of May having been collected at this point, compared to recent months which have tended to be 99% or better.

Dividend

Group dividend policy:to distribute 85-90% of rental profits via dividends each financial year, in compliance with the requirement of the Irish REIT legislation to distribute at least 85%. The interim dividend in a financial year will usually be 30-50% of the total ordinary dividends paid in respect of the prior financial year.

The Board has proposed a final dividend of 3.0 cent per share (2019: 2.0 cent), taking the total dividend for the financial year to 4.75 cent per share. This is a 35.7% increase on prior year (2019: 3.5 cent) and represents 86% of EPRA EPS for the financial year (2019: 89%). Subject to approval at the Group's AGM on 29 July 2020, the final dividend is expected to be paid on 31 July 2020 to shareholders on the register at 3 July 2020. The final dividend will be a Property Income Distribution in respect of the Group's property rental business, as defined under the Irish REIT legislation.

Hibernia's Dividend Reinvestment Plan ('DRiP') is available to shareholders and allows them to instruct Link, the Group's registrar, to reinvest the cash dividends paid by Hibernia in the purchase of existing ordinary shares in the Company. The terms and conditions of the DRiP and information on how to apply are available on the Group's website.

Tax changes introduced in Finance Act 2019

In the 2020 Budget announced in early October 2019 and the subsequent Finance Act, which came into law in December 2019, the Irish Government announced a number of changes to the taxation of Irish property which can be categorised into those that directly impact the Group (either immediately or possibly at some point in future) and those that do not. We summarise these changes below and estimate the impact for the Group where possible and/or appropriate.

Main tax changes directly impacting the Group

Overview	Type of change	Effective from	Impact on Hibernia
Stamp duty increased from 6% to 7.5% on all commercial property transactions in Ireland	Market change	9 October 2019 (unless a binding contract was in place before this date and it completed by 31 December 2019)	· C&W, the Group's valuer, estimates that withoutthe increase in stamp duty, the value of the Group's portfolio at 31 March 2020 would have been 1.5% higher (€22m) · This means the increase in stamp duty resulted in a 1.8% (3.2c) reduction in the Group's NAV per share at 31 March 2020
Increase in the rate of dividend withholding tax ('DWT') from 20% to 25% for all dividends paid by Irish companies	Market change	1 January 2020	· The change affects shareholders directly · The impact will vary depending on the individual circumstances of each shareholder and whether relief is available under a tax treaty
Where an entity ceases to be a REIT, there will no longer be a deemed disposal and reacquisition of the assets at market value unless the REIT has been in existence for 15 years or more	REIT change	9 October 2019	· No immediate change for the Group · If Hibernia ceased to be a REIT before the expiry of the 15-year period (i.e. before December 2028), this means the original tax base cost of the assets would apply to subsequent disposals, not the market value at the date of cessation · This could create latent tax for any bidder and reduce the price it would be prepared to pay to acquire the Group
85% of any proceeds a REIT generates from the sale of a rental property which are not: · Reinvested within a three-year window (spanning one year before and two years afterwards) · Used to repay debt specifically used to acquire, enhance or develop that rental property · Distributed to shareholders within two years of sale (and thus subject to DWT) will be taxed at 25% (an effective rate of 21.25% on the uninvested proceeds)	REIT change	9 October 2019	· No immediate impact · With low LTV and a pipeline of potential future development projects with significant capital expenditure requirements, it is unlikely that Hibernia will fail to reinvest any future sales proceeds within the three year window in the near-term or the medium-term
REITs are now subject to a 'wholly and exclusively' test for expenses in arriving at exempt income. Any amount of expenses deemed not to be incurred 'wholly and exclusively' for the purposes of the property rental business of the REIT will be subject to a 25% tax charge	REIT change	1 January 2020	· No immediate impact · It is understood that this measure is not intended to create a tax charge for expenses incurred 'wholly and exclusively' for the residual business of the REIT

Tax changes not directly impacting the Group

Irish Real Estate Investment Funds ('IREFs'): anti-avoidance rules were introduced for IREFs. Broadly these seek to counteract perceived aggressive tax planning by some IREFs by disincentivising the use of high levels of debt and excessive costs as a means of reducing profits liable to IREF tax. While the changes do not directly impact the Group, with almost €17bn of property held within IREF structures at the end of 2017 (source: Central Bank of Ireland) any changes which negatively impact IREFs may indirectly affect the wider property market.

Schemes of arrangement: stamp duty on corporate acquisitions undertaken by a scheme of arrangement was increased to 1% (previously 0%).

IMPACT OF COVID-19

While it is still too early to have visibility on the full impact of COVID-19 on Hibernia, we have, throughout this document, described how the Group is positioned and the actions we are taking to mitigate the risks arising from the crisis. For ease of reference we summarise the relevant points again by key risk in the table below.

Risk from COVID-19	Hibernia position/action
Health and safety of staff, tenants, suppliers and the community	· Hibernia head office staff are working from home · Dedicated manager selected to oversee Hibernia response to COVID-19 · Many tenant employees are also working from home although all our managed buildings remain open and accessible as needed by tenant employees · We have prepared our buildings for increasing usage as the lockdown eases with individual building plans covering access control, physical distancing measures, cleaning/sanitising and signage · 2 Cumberland Place, our only development site, has now reopened, with appropriate precautionary measures, having been closed between 28 March and 18 May 2020 · We are allowing healthcare staff to stay in the 12 un-rented units in Cannon Place on a temporary, pro bono basis while they assist with the health crisis
Remote working and social distancing measures may disrupt business operations	· As part of our business continuity planning we had already ensured we were prepared for remote working: our main IT systems are cloud-based and many staff have portable work computers · We are using software such as Microsoft Teams to communicate effectively within the Group (e.g. weekly all-staff update call) and outside it · 2 Cumberland Place, our only development site, has now reopened: completion is expected to be delayed by c. three months to late 2020
Investment market activity and property values may decline	· Having one of the lowest leverage levels in the European REIT sector (LTV at Mar-20: 16.5%) means Hibernia can withstand a 65% decline in portfolio value without breaching debt covenants (at Mar-20) · €136m of cash and undrawn facilities (net of committed capital expenditure) at Mar-20 to invest in opportunities that arise · Beyond our committed capital expenditure of €18m, primarily on 2 Cumberland Place, we have no current development exposure
Occupational market activity and rental values may decline	· As above, low leverage (LTV at Mar-20: 16.5%) means Hibernia can withstand a 76% decline in earnings before interest and tax (58% decline in rental income) without breaching debt covenants (as at Mar-20) · The WAULT on the Group's in-place office portfolio is 6.4 years · The Group has a diverse range of tenants, many of which are large multinational companies with strong balance sheets
Debt funding may become harder to find/more expensive	· We have low leverage (LTV at Mar-20: 16.5%), weighted average debt maturity of 4.4 years and no debt maturities before Dec-23 · We also have cash and undrawn facilities after committed capital expenditure and dividends of €136m and are maintaining a minimum cash balance of €20m for liquidity purposes · The Group's fully unsecured debt structure gives us access to the widest possible range of funding alternatives · Beyond our committed capital expenditure of €18m, primarily on 2 Cumberland Place, we have no current development exposure
Tenants may not be able to pay their rent	· The Group has a diverse range of tenants, many of which are large multinational companies (65% of our contracted rent is from the TMT sector and government/stateentities), and to date our rent collection statistics have remained strong · The WAULT on the Group's in-place office portfolio is 6.4 years
Dividends may need to be cut	· We have proposed a final dividend for the financial year of 3.0 cent per share (taking the full year dividend to 4.75 cent or 86% of our EPRA EPS), subject to approval at the AGM and payable at the end of July as normal · We intend to continue to comply with the requirement in the REIT legislation to distribute at least 85% of our rental profits annually via dividends · The Group has a diverse range of tenants, many of which are large multinational companies, and to date our rent collection statistics have remained strong · The business is well capitalised, with low leverage and significant cash and undrawn facilities (see above)

Selected portfolio information

1. Summary EPRA measures

EPRA performance measure	Unit	Financial year ended 31 March 2020	Financial year ended 31 March 2019
EPRA earnings	€'000	38,093	27,472
EPRA EPS	cent	5.5	4.0
Diluted EPRA EPS	cent	5.5	3.9
EPRA cost ratio - including direct vacancy costs	%	26.8%	39.3%
EPRA cost ratio - excluding direct vacancy costs	%	25.2%	38.3%
EPRA performance measure	Unit	As at 31 March 2020	As at 31 March 2019
EPRA Net Initial Yield ('NIY')	%	4.1%	3.6%
EPRA 'topped-up' NIY	%	4.4%	4.1%
EPRA net asset value ('EPRA NAV')	€'000	1,231,778	1,219,374
EPRA NAV per share	cent	179.3	173.3
EPRA triple net assets ('EPRA NNNAV')	€'000	1,224,798	1,218,539
EPRA NNNAV per share	cent	178.3	173.2
Like-for-like rental growth	%	3.9%	7.6%
EPRA vacancy rate	%	6.9%	10.7%

Note: EPRA has introduced new net asset value measures for reporting periods starting after 1 January 2020. Please see Supplementary Information at the end of this report for further details.

2. Top 10 in-place office occupiers by contracted rent and % of contracted in-place office rent roll

	Top 10 tenants	€'m	%	Sector
1	HubSpot Ireland Limited	10.5	18.2%	TMT
2	OPW	6.0	10.4%	Government/state entity
3	Twitter International Company	5.1	8.8%	TMT
4	Zalando	2.9	5.0%	TMT
5	Autodesk Ireland Operations	2.8	4.9%	TMT
6	Informatica Ireland EMEA	2.1	3.7%	TMT
7	Riot Games	2.0	3.4%	TMT
8	Electricity Supply Board	1.9	3.3%	Government/state entity
9	Travelport Digital Limited	1.8	3.2%	TMT
10	BNY Mellon Fund Services	1.6	2.8%	Banking and capital markets
	Top 10 total	36.7	63.7%
	Rest of portfolio	21.0	36.3%
	Total contracted in-place office rent	57.7	100%

3. In-place office contracted rent by tenant business sector

Sector	€'m	%
TMT	32.5	56%
Government/state entity	10.3	18%
Banking and capital markets	7.2	13%
Professional services	4.3	7%
Insurance and reinsurance	1.6	3%
Other	1.3	2%
Serviced offices	0.5	1%
Total	57.7	100%

4. In-place office contracted rent and WAULT progression

	Mar-19	Movement to Sep-19	Sep-19	Movement to Mar-20	Mar-20
All office contracted rent1	€50.4m	+8%	€54.3m	+6%	€57.7m4
In-place office contracted rent1	€50.4m	+8%	€54.3m	+6%	€57.7m
In-place office WAULT2	7.5yrs	-8%	6.9yrs	-7%	6.4yrs
In-place office vacancy3	12%	-	12%	-5pp	7%

1. Excl. arrangement with Iconic Offices at Block 1 Clanwilliam.

2. To earlier of break or expiry.

3. By net lettable office areas. Office area only (i.e. excl. retail, basement, gym, Townhall etc.).

4. In Apr-20 3M pre-let space in 2 Cumberland Place, increasing all office contracted rent to €59.2m.

Principal Risks and uncertainties

The Board has carried out a thorough assessment of the Group's emerging and principal risks, including those that could threaten the Group's business model, future performance, solvency or liquidity. It has assessed how these risks could best be mitigated through a combination of risk management, internal controls and insurance cover. The mitigation measures that are maintained in relation to these risks are designed to provide a reasonable and not absolute level of protection against the impact of the events in question. These risks and mitigants are reviewed and updated on a regular basis and represent the Board's current assessment of risk.

The principal risks and uncertainties facing the Group are set out on the following pages 22 to 27, together with the potential impact and the mitigating actions and controls in place. Further detail on the Group's approach to risk management and mitigation will be included in the 2020 Annual Report due to be published in June 2020. The impact of the COVID-19 pandemic has increased risk ratings in a number of areas as well as the overall level of risk the Group is currently exposed to and the Board continues to monitor the situation closely. The COVID-19 pandemic and the Group's response are discussed in detail on page 19 of this statement. The main changes to our principal risks since 31 March 2019 are:

· Key risks added (excluding amalgamations):

o COVID-19 pandemic

o Climate change risk: Failure to respond appropriately and sufficiently to climate change

· Key risks removed (excluding amalgamations):

o Development risk: Adverse outcome regarding re-zoning at Newlands

· Residual impacts increased:

o Strategic risk: Inappropriate business strategy

o Market risk: Weakening economy

o Regulatory, tax and political risk: Management of tax and changes to tax status or environment

· Residual impacts reduced:

o None

New Risks

Exposure	Impact	Probability	Key controls and mitigants	Comments	Residual risk impact
COVID-19 pandemic
Most areas of the Group's business could be impacted by the pandemic leading to: Failure to achieve strategic goals. Negative impact on business operations from staff illness. Poor returns (capital and income) and/or losses. Delay to development projects resulting in lower returns. Increased cost of financing/lower availability of funding. Increased risk of cyber-attack.	High	High	All head office staff are working effectively from home using remote access infrastructure and cloud-based systems that were already in use by the Group. Close oversight by Board and Executive Committees of each area of business and frequent stress tests run as part of viability assessments. Dedicated manager selected to oversee our response to the COVID-19 pandemic. Increased tenant communication and tenant financial health being closely monitored to manage potential issues proactively. The Group policy is to have only modest financial leverage. IT and security updates are issued to all staff on a regular basis. Increased surveillance over IT and cyber security procedures.	A detailed discussion of the impact of the COVID-19 pandemic and the Group's response can be found on page 19 of this Statement. As mentioned, it has the potential to negatively impact most areas of the business and this is discussed under the relevant principal risks below. A high degree of uncertainty as to the longer-term impacts still exists. The Group has low leverage (16.5% LTV at Mar-20), cash and undrawn facilities after commitments of €136m and no debt repayments due until Dec-23, so it is well positioned to cope with the adverse impact in the near term and medium term. The Group carefully assesses the financial health of all prospective commercial tenants ahead of signing leases and continues to monitor them once they become tenants. In addition, the Group tries to agree long leases and its office portfolio (c. 90% of Group rental income) has a WAULT of 6.4 years at present. The Board is monitoring the evolving situation closely.	High
Climate change risk: Failure to respond appropriately and sufficiently to climate change
Failure to achieve strategic goals. Assets become less attractive to investors and/or tenants without significant expenditure leading to a negative impact on income and/or capital returns. Failure to meet stakeholders' expectations resulting in reputational damage.	Medium	Medium	Experienced Sustainability Manager appointed who sits on all of the Group's Executive Committees. The Sustainability Committee, Senior Management and the Board review environmental, social and governance matters regularly. The Group uses external experts to advise on operational and capital improvements to be made to investment assets and development assets. The Group's ESG performance is benchmarked against industry standards, including GRESB, giving visibility of its relative performance to the Group and its stakeholders.	The Sustainability section of the Group's website outlines the Group's targets, results and future plans in ESG. The Group is in the process of reviewing its Sustainability Strategy to seek improvements and a materiality review has been carried out to identify the issues material to the business and our stakeholders. Active daily monitoring of the energy consumption of the Group's multi-tenanted buildings is due to commence shortly. In 2019 the Group received an EPRA Gold Award for the quality of its sustainability disclosures for the second successive year and has received three green stars from GRESB with a score of 75% (an improvement of 17 percentage points on the prior year's submission). We are also intending to also participate in the Carbon Disclosure Project in 2020.	Medium

Existing risks

Exposure	Change since last year Impact Probability		Key controls and mitigants	Comments	Residual risk impact
Strategic risk: Inappropriate business strategy
Failure to anticipate/react to trends e.g. changes in office usage post COVID-19, changing occupier requirements more generally, underperformance of central Dublin offices. Mistimed investments or disposals through incorrect reading of the property cycle.	Unchanged	Increased	Experienced Senior Management and Board with significant expertise in property matters. Board and Investment Committee overview of investment/divestment decisions. Close monitoring of market and economic lead indicators and use of expert advisers. Rigorous assessment of all acquisition and disposal opportunities and of projected portfolio returns. Regular tenant interaction at all levels of the organisation.	Experienced market professionals in both Board and Senior Management closely monitor strategy alongside market and other trends. Having building management in-house and a full-time Sustainability Manager increases the frequency of interactions with tenants and therefore gives some visibility on their views and any changes to these. Compliance with sustainability and environmental standards has been an increasing focus for the Group and its stakeholders. The Group maintains low leverage (LTV of 16.5% at Mar-20) to enhance its strategic flexibility and ability to move quickly on strategic decisions.	High
Market risk: Weakening economy
The COVID-19 pandemic is likely to have a severe negative impact on the global economy in 2020, despite the interventions of authorities around the world. Ireland's economy is a relatively small and open economy and is therefore sensitive to deterioration in macro-economic conditions elsewhere. A drop in economic activity usually leads to declining property values and/or rental income.	Unchanged	Increased	Active monitoring of economic lead indicators and market developments. Regular financial forecasting, stress testing and scenario planning. Risk appetite limits are in place for key operating indicators. Group policy is to use modest leverage levels throughout the property cycle.	The full market impact of the COVID-19 pandemic is yet to be realised. These conditions may have an important bearing on the future performance of the Irish economy and, in turn, on the Group. Grade A vacancy rates in city centre Dublin offices at Mar-20 remain low at 5.9% and take-up in Q1 2020 was strong at over 0.8m sq. ft., though active demand fell by 20% between the end of February and the end of April 2020. Whilst early indications are present the negative impact of COVID-19 on the property market is yet to be fully felt. The Group targets long leases and tenants with strong covenants, helping to reduce vacancy risks in a market downturn and provide a level of protection in the short term. The Group's WAULT to the earlier of break/expiry on its office portfolio (c. 90% of rental income) was 6.4 years at 31 March 2020. Increased credit risk concerns due to the likely market downturn mean that the Group has placed an increased focus on credit risk management and collection of rents and service charges, which continue to hold up well (see page 16 for rent collection statistics).	High
Market risk: Negative impacts from political actions/trends nationally and internationally
Measures taken to recoup emergency government spending once the COVID-19 crisis is over could result in greater taxation on Irish companies including the Group. Similarly, the new Irish Government, when it is formed, could take policy decisions which adversely affect the Group. Though the UK's exit from the European Union may be beneficial for Dublin in the longer term, any disorderly end to the transitional arrangements in place at present could cause economic damage to Ireland, particularly in the near term. International tax reform may reduce Ireland's competitiveness as a destination for foreign direct investment.	Increased	Increased	Regular reviews by Senior Management and discussion with economic and tax experts. Membership of Irish Institutional Property which represents the interests of institutional property owners in Ireland.	There is significant uncertainty at present about the ultimate impact of the COVID-19 crisis on the Irish economy and globally and similarly there is uncertainty as to how authorities in Ireland and globally will respond to whatever position the world finds itself in once the crisis is over.	Medium
Investment risk: Inappropriate concentration on single assets, locations, tenants or tenant sectors
Excessive exposure leading to poor performance and/or reduced liquidity.	Unchanged	Unchanged	Key risk indicators regarding sector, tenant and geographic concentration as well as rent collection statistics are reported to Senior Management regularly and to the Board on a quarterly basis. Assessment of the covenant strength of commercial tenants is performed ahead of signing leases with them and periodically once they become tenants and on an ad-hoc basis where there are specific concerns. At the moment, given the economic uncertainty an enhanced level of scrutiny is being applied.	All the Group's investments are within Dublin and the majority are in the office sector. The Group focuses on multi-let buildings and has assembled a balanced portfolio comprising 36 properties with some held for investment purposes and some for their future (re)development potential. At Mar-20 the largest single asset represented 11% of the portfolio by value (11% at Mar-19). The Group's 'top 10' tenants account for 56% of the portfolio contracted rent roll as at Mar-20 (61% at Mar-19). See notes 4, 5 and 6 to the consolidated financial statements for more information on the disaggregation of our income.	Medium
Development risk: Poor or mistimed execution of development projects
Poor returns and/or losses. Development projects not managed properly leading to delays and cost overruns. Inappropriate level of development as a percentage of overall portfolio. Failure to achieve expected rental levels.	Unchanged	Unchanged	Experienced development team with established relationships with professional advisers. Board and Development Committee overview; new members have increased experience available to the Committee. Rigorous monitoring of development expenditure against approved budgets. Sustainable building design a key focus from early planning stage. Marketing of properties starts well in advance of completion date to de-risk the development portfolio.	At Mar-20 the Group had one active development scheme, 2 Cumberland Place. Practical completion has been delayed by the COVID-19 shutdown but at present it is expected to complete by the end of 2020 and is 41% pre-let which has reduced the risk of this development. Beyond this, the Group has no active developments and can make decisions about future development commencements based on prevailing market conditions. Construction cost inflation had been an increasing pressure on profitability in the Group's development planned projects; with no active contracts apart from 2 Cumberland Place, the Group is not locked into overly expensive tenders while the market value of property and construction contract pricing may be falling due to the impact of COVID-19. The Group's pipeline of developments is kept under review to ensure that the plans are in line with market trends. The Group has adopted LEED certification for its projects to provide an objective measure of building sustainability and targets Gold or Platinum Awards.	Medium
Development risk: Contractor or sub-contractor default
Poor returns and/or losses. Higher costs due to the loss of fixed pricing. Significant delays in completing development projects.	Decreased	Increased	Use of reputable and larger contractors. Use of expert advisers to assist in management of contractors and sub-contractors. Due diligence is completed on main contractors. Close oversight by experienced development team, project managers and Development Committee.	The Group uses expert advisers to supplement its in-house expertise in assessing and managing contractors. The Group seeks to use contractors with proven track records which also helps to mitigate construction risks, including the risk of failing to comply with applicable building regulations. Fixed price contracts are in place to remove inflation risk. 2 Cumberland Place is the only site currently under development and it is already well advanced so the impact of contractor default is anticipated to be less than it has been in recent years despite COVID-19.	Medium
Regulatory, tax and political risk: Management of tax and changes to tax status or environment
Group's REIT status may be revoked if it fails to satisfy all the relevant tax and legislative requirements. Specific changes to tax on Irish property and REITs. Changes to the broader taxation environment may impact on the Group's operations.	Unchanged	Increased	Effective monitoring of tax and REIT requirements compliance is completed by the Finance Team and tax advisers and reviewed quarterly by the Board and the Audit Committee. Management, the Board and the Audit Committee spend substantial time, and retain external experts as necessary, to ensure compliance with current and possible future tax requirements.	The Group proactively reviews any tax changes specific to the Group and to the broader environment and has appointed expert advisers to review, assist and advise. Where necessary representations are made to government and other state agencies to highlight tax policies or changes that could have a negative impact. Compliance with the REIT regime is monitored by the Board and there have been no breaches to date. See page 18 for details of the impacts of tax changes introduced in the Finance Act 2019.	Medium
Operations risk: Disruption from external threat
An external event causes significant disruption and damage to the Group's portfolio and/or operations.	Unchanged	Unchanged	Business continuity and crisis management plans are reviewed at least annually. Insurance policies include cover for catastrophic events. Security measures and emergency plans are in place for all our buildings.	Business continuity plans are reviewed periodically and at a minimum on an annual basis. The Group has invested in its IT systems to ensure information is stored securely and is fully cloud-based. Staff also have the ability to work remotely, as they are at present due to COVID-19. See page 19 for the impact of COVID-19.	Medium
Operations risk: Cyber-attack/threat
Significant damage to the Group's business. Reputational damage.	Unchanged	Increased	External consultants complete regular testing of IT security and systems. Regular back-up schedules are in place for all Group information and data. Staff IT information security and cyber security training plan is in place. IT and security updates are issued to all staff on a regular basis. Increased surveillance over IT and cyber security procedures.	Cyber security continues to be a focus as the incidence and sophistication of cyber security attacks increases. The Group has continued to improve its IT security measures during the financial year 2020 by reviewing controls and working closely with our IT consultants. The probability of cyber-attack has increased in the last number of months as staff are working remotely as a result of the COVID-19 pandemic. The Group has seen an increased number of hacking attempts but has managed these incidents successfully, ensuring Group data was not compromised. A high-level review of selected cyber security/information security management, security operations, security technology management and IT continuity controls within the Group and its IT service providers was completed in April 2019. All internal audit recommendations have since been implemented.	Medium
Operations risk: Loss or shortage of staff to execute our business plan or failure to motivate staff
Failure to achieve strategic goals. Replacement of departing staff may be challenging and/or costly.	Unchanged	Decreased	Employee remuneration is strongly linked to Group and individual performance and variable pay includes deferred element. Periodic assessment of remuneration packages for all staff is completed to ensure they are in line with market. Positive team spirit is fostered through social and training events. Personal development and training requirements are reviewed annually.	Staff turnover remains low at only 14% in the 2020 financial year and vacancies have been successfully filled. The Group has an annual appraisal system for staff, with interim reviews every six months. As well as reviewing performance this system also sets targets for personal development. A confidential staff survey is completed annually: recent surveys have shown a high degree of employee satisfaction The Group also hosts regular training sessions to improve staff knowledge in all areas of the business and the industry. During the COVID-19 pandemic, all head office staff are working from home. Online video conferencing is helping to maintain togetherness during this difficult time: this includes a weekly all-hands online meeting led by the CEO.	Low
Operations risk: Reputational damage
Damage or losses due to fraud, error or cybercrime. Inability to attract and retain staff resulting in higher costs. Regulatory sanctions in the event of a non-compliance issue. Health and safety risks.	Unchanged	Unchanged	Effective internal controls and fraud prevention measures in place. Board, Audit Committee and internal audit scrutiny of compliance, internal controls and related matters. External consultants complete regular testing of IT security and systems. Health and Safety Committee meet quarterly to review all health and safety issues. The Group uses external advisers to complete regular risk assessments for the Group.	The Group adheres to the highest standards of corporate governance. The Group uses PwC to provide internal audit services to provide additional assurances around internal controls. Building management is completed in-house so the Group can manage its multi-let properties to its own rigorous standards and is not dependent on third parties for this.	Low
Asset management risk: Poor asset management
Income not maximised through poor asset management. Failure to proactively maintain assets leading to increased costs. Loss of tenants due to lack of satisfaction with space and service.	Unchanged	Unchanged	All building and asset management for multi-let office portfolio is in-house to ensure regular interactions with our tenants. A regular survey of tenants is undertaken to assess satisfaction/areas for improvement. Analysis of covenant strength of prospective and existing tenants. Focus on improving sustainability credentials.	As well as daily interactions with tenants by the Group's building managers and head of occupier services, the Group carries out regular tenant surveys to assess satisfaction and areas for improvement. The Group has also, as a result of the COVID-19 pandemic, introduced a tenant credit risk rating system, in order to monitor more closely those at greatest risk of default (see page 19 for more details) As outlined elsewhere, the Group is increasingly focused on sustainability, and has hired a dedicated Sustainability Manager.	Low
Finance risk: Inappropriate capital structure/lack of funds for investment
Failure to meet target returns due to funding limitations. Incorrect balance between excess or lack of gearing.	Unchanged	Increased	The Group's policy is to maintain modest leverage with target loan to value ratio of 20-30% and majority of interest rate exposure fixed or hedged. Fully unsecured debt structure maximises alternatives for the Group if additional funding is required. Active monitoring and assessment of current and future financial and cash flow requirements and availability of funding. Board and Finance Committee oversight.	As the Group has €136m uncommitted funding available at Mar-20 (Mar-19: €143m) the impact of liquidity tightening post COVID-19 is largely mitigated. The Group is focused on ensuring available liquidity remains strong, and so further returns of capital to shareholders beyond ordinary dividends are unlikely in the near term. At Mar-20 the Group had a LTV ratio of 16.5% (Mar-19: 15.6%), one of the lowest in the European REIT universe. The weighted average maturity of the Group's debt is 4.4 years at Mar-20 and the Group has no debt repayments due until Dec-23. No covenant breaches occurred in the period.	Low

Consolidated income statement

For the financial year ended 31 March 2020

		Financial year ended 31 March 2020	Financial year ended 31 March 2019
	Notes	€'000	€'000
Revenue	5	67,930	61,387
Rental income	5	61,812	56,027
Property operating expenses	5	(3,227)	(2,718)
Net rental and related income	5	58,585	53,309
Operating expenses
Administration expenses	8	(13,246)	(13,890)
IMA performance-related payments		-	(5,401)
Expected credit losses on financial assets	21	(147)	-
Total operating expenses		(13,393)	(19,291)
Operating profit before gains and losses		45,192	34,018
Gains and losses on investment property	7	22,856	98,105
Other gains		10	140
Operating profit		68,058	132,263
Finance income		3	5
Finance expense	11	(7,198)	(8,226)
Profit before income tax		60,863	124,042
Income tax credit/(expense)	12	180	(583)
Profit for the financial year attributable to owners of the parent		61,043	123,459
EPRA earnings for the financial year	14	38,093	27,472
Earnings per share
Basic earnings per share (cent)	14	8.9	17.8
Diluted earnings per share (cent)	14	8.8	17.6
EPRA earnings per share (cent)	14	5.5	4.0
Diluted EPRA earnings per share (cent)	14	5.5	3.9

Consolidated statement of comprehensive income

For the financial year ended 31 March 2020

		Financial year ended 31 March 2020 €'000	Financial year ended 31 March 2019 €'000
	Notes
Profit for the financial year attributable to owners of the parent		61,043	123,459
Other comprehensive income, net of income tax
Items that will not be reclassified subsequently to profit or loss:
Gain on revaluation of land and buildings	17	1,658	723
Items that may be reclassified subsequently to profit or loss:
Net fair value movement on hedging instruments entered into for cashflow hedges	23.b	54	41
Total other comprehensive income		1,712	764
Comprehensive income for the financial year attributable to owners of the Parent		62,755	124,223

Consolidated statement of financial position

As at 31 March 2020

		31 March 2020 €'000	31 March 2019 €'000
	Notes
Assets
Non-current assets
Investment property	16	1,465,183	1,395,418
Property, plant and equipment	17	8,631	5,902
Other assets	18	534	-
Other financial assets	20	34	194
Trade and other receivables	21	10,215	7,928
Total non-current assets		1,484,597	1,409,442
Current assets
Trade and other receivables	21	3,751	40,164
Cash and cash equivalents	19	28,454	22,372
		32,205	62,536
Non-current assets classified as held for sale	18	-	534
Total current assets		32,205	63,070
Total assets		1,516,802	1,472,512
Equity and liabilities
Capital and reserves
Share capital	22	68,466	69,759
Share premium	22	630,276	624,483
Capital redemption fund	22	1,757	-
Other reserves	23	5,379	9,157
Retained earnings	24	525,271	515,140
Total equity		1,231,149	1,218,539
Non-current liabilities
Financial liabilities	25.a	259,691	231,048
Deferred tax liabilities	26	395	547
Total non-current liabilities		260,086	231,595
Current liabilities
Financial liabilities	25.a	517	507
Trade and other payables	27	21,873	19,863
Contract liabilities	28	3,177	2,008
Total current liabilities		25,567	22,378
Total equity and liabilities		1,516,802	1,472,512
IFRS NAV per share (cent)	15	179.8	174.7
Diluted IFRS NAV per share (cent)	15	179.2	173.2
EPRA NAV per share (cent)	15	179.3	173.3

Consolidated statement of changes in equity

For the financial year ended 31 March 2020

	Share capital	Share premium	Capital redemption fund	Property revaluation reserve	Cashflow hedge reserve	Share-based payment reserve	Retained earnings	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance at 1 April 2018	69,235	617,461	-	1,166	(329)	8,783	415,414	1,111,730
Profit for the financial year	-	-	-	-	-	-	123,459	123,459
Other comprehensive income for the period	-	-	-	723	41	-	-	764
Total comprehensive income for the period	69,235	617,461	-	1,889	(288)	8,783	538,873	1,235,953
Issue of share capital	524	7,022				(7,546)	(14)	(14)
Dividends paid in financial year	-	-	-	-	-	-	(23,719)	(23,719)
Share-based payments	-	-	-	-	-	6,319	-	6,319
Balance at 31 March 2019	69,759	624,483	-	1,889	(288)	7,556	515,140	1,218,539
Profit for the financial year	-	-	-	-	-	-	61,043	61,043
Other comprehensive income for the financial year	-	-	-	1,658	54	-	-	1,712
Total comprehensive income for the financial year	69,759	624,483	-	3,547	(234)	7,556	576,183	1,281,294
Issue of share capital	464	5,793	-	-	-	(6,257)	(10)	(10)
Own shares acquired and cancelled in the financial year	(1,757)	-	1,757	-	-	-	(25,036)	(25,036)
Dividends paid in financial year	-	-	-	-	-	-	(25,866)	(25,866)
Share-based payments	-	-	-	-	-	767	-	767
Balance at 31 March 2020	68,466	630,276	1,757	3,547	(234)	2,066	525,271	1,231,149

Consolidated statement of cash flows

For the financial year ended 31 March 2020

		31 March 2020 €'000	31 March 2019 €'000
	Notes
Cash flows from operating activities
Profit for the financial year attributable to owners of the parent		61,043	123,459
Adjusted for:
Gains on sale of investment property	7	-	(2,578)
Adjustments for non-cash movements	29.a	(13,932)	(77,278)
Operating cash flow before movements in working capital		47,111	43,603
Income tax refund received		81	-
Finance income		3	5
Cash-settled share-based payments	10.c	(485)	(339)
(Increase) in trade and other receivables		(670)	(961)
Increase/(decrease) in trade payables		3,631	(447)
Increase in contract liabilities		1,169	263
Net cash inflow from operating activities		50,840	42,124
Cash flows from investing activities
Cash expended on investment property	29.b	(47,941)	(86,847)
Cash received from sales of investment property	29.c	34,503	64,016
Cash expended on property, plant and equipment	29.d	(2,016)	(52)
Cash received in relation to other assets		-	292
Finance expenses paid		(6,369)	(9,546)
Net cash flow (absorbed) by investing activities		(21,823)	(32,137)
Cash flow from financing activities
Dividends paid	24	(25,866)	(23,719)
Cash expended on share buy-back	22	(25,036)	-
Borrowings drawn	25.b	57,945	340,412
Borrowings repaid	25.b	(29,968)	(326,372)
Derivatives premium paid		-	(443)
Share issue costs		(10)	(14)
Net cash (outflow) from financing activities		(22,935)	(10,136)
Net increase/(decrease) in cash and cash equivalents		6,082	(149)
Cash and cash equivalents start of financial year		22,372	22,521
Increase/(decrease) in cash and cash equivalents		6,082	(149)
Net cash and cash equivalents at end of financial year		28,454	22,372

Section I - General

This section contains the significant accounting policies and other information that apply to the Group's financial statements as a whole. Those policies applying to individual areas such as investment property are described within the relevant note to the consolidated financial statements. This section also includes a summary of the new European Union ('EU') endorsed accounting standards, amendments and interpretations that have not yet been adopted and their expected impact on the reported results of the Group.

The Group has applied IFRS 16 for the first time in these financial statements . There was no material impact on the financial results or on the financial position as at 1 April 2019 as a result of adopting this standard.

1. General information

Hibernia REIT plc, the 'Company', registered number 531267, together with its subsidiaries and associated undertakings (the 'Group'), is engaged in property investment and development (primarily office) in the Dublin market with a view to maximising its shareholders' returns.

The Company is a public limited company and is incorporated and domiciled in Ireland. The address of the Company's registered office is 1WML, Windmill Lane, Dublin, D02 F206, Ireland.

The ordinary shares of the Company are listed on the primary listing segment of the Official List of Euronext Dublin (formerly the Irish Stock Exchange) (the 'Irish Official List') and the premium listing segment of the Official List of the UK Listing Authority (the 'UK Official List' and, together with the Irish Official List, the 'Official Lists') and are traded on the regulated markets for listed securities of Euronext Dublin and the London Stock Exchange plc (the 'London Stock Exchange').

2. Basis of preparation

2.a Statement of compliance and basis of preparation

These consolidated financial statements of Hibernia REIT plc are non-statutory consolidated financial statements. The Auditor has not completed its audit but the Directors expect that there will be no changes to the financial information between these non-statutory consolidated financial statements and the statutory financial statements that will be contained in the Annual Report. The Annual Report of the Group is expected to be issued in late June 2020. The consolidated financial statements of Hibernia REIT plc have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the EU and the Companies Act 2014. IFRS as adopted by the EU differ in certain respects from IFRS as issued by the International Accounting Standards Board ('IASB'). The Group financial statements therefore comply with Article 4 of the EU IAS Regulation. The consolidated financial statements have been prepared on the historical cost basis, except for the revaluation of investment properties, owner-occupied buildings and derivative financial instruments that are measured at fair value at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

The Group has not early adopted any forthcoming IASB standards (note 3).

2.b Alternative performance measures ('APMs')

The Group uses alternative performance measures to present certain aspects of its performance. These are explained and, where appropriate, reconciled to equivalent IFRS measures in the Supplementary Information section (unaudited) at the end of this document. The main APMs used are those issued by the European Public Real Estate Association ('EPRA') which is the representative body of the listed European real estate industry. EPRA issues guidelines and benchmarks for reporting both financial and sustainability measures. These are important in allowing investors to compare and measure the performance of real estate companies across Europe on a consistent basis. EPRA earnings and EPRA NAV are presented within the consolidated financial statements and fully reconciled to IFRS as these two measures are among the key performance indicators for the Group's business.

2.c Functional and presentation currency

These consolidated financial statements are presented in euro, which is the Company's functional currency and the Group's presentation currency.

2.d Basis of consolidation

The consolidated financial statements incorporate the consolidated financial statements of the Company and entities controlled by the Company (its subsidiaries). The accounting policies of all consolidated entities are consistent with the Group's accounting policies. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

2.e Assessment of going concern

The consolidated financial statements have been prepared on a going concern basis.

The Board has assessed the viability of the Group over a three-year period to March 2023. It is satisfied that a forward-looking assessment of the Group for this period is sufficient to enable a reasonable assessment of viability, and also in order to opine on the appropriateness of the going concern basis of preparation of the financial statements. This assessment considers the Group's current position and the principal and emerging risks that it faces. All of these risks are considered to be material in the assessment of viability. The most significant of these at the date of preparing these financial statements is the Novel Coronavirus ('COVID-19') pandemic, the full impact of which it is not yet possible to fully or accurately quantify, and this has been the subject of intensive assessment by the Board since 31 March 2020 and will continue to be so for some time to come. Factors specifically considered in light of the anticipated effects of this pandemic are:

· Health and safety of staff, tenants, suppliers and the community

· Remote working and social distancing measures may disrupt business operations

· Investment market activity and property values may decline

· Occupational market activity and rental values may decline

· Debt funding may become harder to find/more expensive

· Tenants may not be able to pay their rent

· Dividends may need to be cut

The Directors believe a three-year forward-looking period is appropriate for financial projections and stress testing to assess viability. The Directors have also considered the longer-term risks and opportunities of the Group, for example the office development pipeline extends to at least 2026 and the mixed-use pipeline further still. Financial projections for the current financial year and the following three years are reviewed by the Directors on a quarterly basis. Assumptions have been built into the business and financial planning process which are based on a conservative view of the Group's expected income and investment profile over this three-year period.

An analysis of revenue and a disaggregation of income is outlined in notes 5 and 6. Due to the nature of rental collections, a significant portion of revenue is collected in advance of its due date and 89% of commercial rent for the quarter ending 30 June 2020 had been collected within 7 days of the gale date rising to 93.5% within 60 days of the gale date. 97% of the residential rent due for the month of May 2020 had been collected by the date of this Statement. Information on the Group's financial assets and approach to credit risk is contained in Section IV: introduction, note 21 and note 30.d.

Detail on the financial performance and financial position of the Group is provided in the consolidated financial statements. In particular, note 30 includes details on the Group's financial risk management and exposures.

The Group has a cash balance as at 31 March 2020 of €28m (March 2019: €22m), is generating positive operating cash flows and, as discussed in note 25, has in place debt facilities with average maturity of 4.4 years, no debt maturities until December 2023 and an undrawn balance of €132.6m at 31 March 2020 (March 2019: €160.6m). Its capital commitments as at 31 March 2020 were €18m (31 March 2019: €35m) and it is maintaining a minimum cash balance of €20m for liquidity purposes. As at 31 March 2020, low leverage (LTV 16.5%) means Hibernia can withstand a 65% decline in its portfolio value and a 76% decline in earnings before interest and tax (58% decline in rental income) without breaching debt covenants. There are no reasons to expect that the Group will not be able to meet its liabilities as they fall due for the foreseeable future.

Therefore, the Directors have concluded that the going concern assumption remains appropriate.

2.f Significant judgements

Not all of the Group's accounting policies require the Directors to make difficult, subjective or complex judgements. Any judgements made are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The following are the significant judgements used in preparing these consolidated financial statements:

Valuation of investment property

The valuation of the Group's property portfolio is a key element of the Group's Net Asset Value as well as impacting variable executive and employee remuneration. The Directors have appointed an independent valuer (Cushman & Wakefield, the 'Valuer') to perform the valuations and report to them on its opinion as to the fair value of these properties. However, the nature of the valuation process is inherently subjective and values are derived using comparable market transactions and the Valuer's assessment of market sentiment. This is therefore a significant judgement on this basis.

The Group's investment properties are held at fair value and were valued at 31 March 2020 by the Valuer. Investment property is valued in accordance with guidance in the appropriate sections of the Valuation Technical and Performance Standards ('VPS') and the Valuation Practice Guidance Applications ('VPGA') contained within the Royal Institution of Chartered Surveyors ('RICS') Valuation - Global Standards November 2019 (the 'Red Book'). Valuations are compliant with the International Valuation Standards ('IVS'). Fair value under IFRS 13 is 'the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date'. The Red Book confirms that the references in IFRS 13 to market participants and a sale make it clear that for most practical purposes fair value is consistent with market value. Further information on the valuations and the sensitivities is given in note 16.

The outbreak of COVID-19, declared by the World Health Organisation a 'global pandemic' on 11 March 2020, has impacted financial markets and the global economic environment. At the valuation date, the Valuer has stated that it can place less weight than usual on market evidence for comparison purposes, to inform opinions of value. The current response to COVID-19 means that there is an unprecedented set of circumstances on which to base a judgement. The Valuer has therefore reported on the basis of a material uncertainty as per VPS 3 and VPGA 10 of the RICS Red Book Global. This is not intended by the Valuer to suggest that its valuations cannot be relied on but to indicate that less certainty - and a higher degree of caution - should be ascribed to the valuations than would normally be the case.

Property valuations are complex and involve data which is not publicly available, and a degree of judgement. The valuations are based upon the key assumptions of estimated rental values and market-based yields. In light of the material valuation uncertainty because of COVID-19, the Board has paid particular attention to the valuations and especially to properties within the portfolio where the impact may be greatest.

The Directors have reviewed the valuation process undertaken, the meaning of the material uncertainty the Valuer has expressed, changes in market conditions including COVID-19, recent transactions in the market, valuation movements on individual buildings and the Valuer's expectations in relation to future rental growth and yield movement. With the continued uncertainty in relation to the impact of COVID-19, the Directors also considered the extent to which this was impacting the property investment and occupational market in relation to both liquidity and activity. As a result of these reviews, the Directors concluded that the valuation was suitable for inclusion in the Group's consolidated financial statements.

Valuation basis of investment property

The valuation approach for each property, while generally similar, differs based on the physical and investment and/or development attributes of the property. A judgement must be made to decide on the valuation premise appropriate for each asset is its 'highest and best use'. This judgement impacts on the valuation technique that is appropriate for the measurement, considering the availability of data with which to develop inputs that represent the assumptions that market participants would use when pricing the property. All valuations are at Level 3 in the fair value hierarchy.

'Highest and best use'

All investment properties in the Group's portfolio are valued in accordance with their current use, which is also the highest and best use except for:

· Harcourt Square, Marine House and Clanwilliam Court Blocks 1, 2 and 5where, in accordance with IFRS 13:27, the valuations take into account the redevelopment potential upon expiry of the current leases which reflects the highest and best use. It is the Directors' intention to pursue the redevelopment of these properties when the leases have expired. At 31 March 2020 preliminary planning was in place for Harcourt Square and Clanwilliam Court and full planning was in place for Marine House. In April 2020 the Group received full planning for Harcourt Square. These are valued on an investment basis until the end of the leases and on a residual basis thereafter

· Newlands (Gateway)which is currently partly rented on short-term leases, has been valued on a price per acre basis as early stage plans are in place to redevelop this property in future and this approach reflects the highest and best use of this property

· Properties in Malahide Road Industrial Park and Dublin Industrial Estatewhich are currently partly rented on short-term leases, have been valued on a basis that includes recognition of their potential as investment property development sites

· 2 Cumberland Placeis now closer to practical completion and progress has been made in relation to pre-letting parts of the building. Therefore, the valuation methodology has changed from a residual to an investment valuation with outstanding capital expenditure recognised within the valuation

2.g Analysis of sources of estimation uncertainty

Valuation of investment property

Although valuations are based on the Directors' best knowledge of the amount, event or actions, actual results may differ from those estimates. The Group's investment properties are held at fair value and were valued at 31 March 2020 by the Valuer on the basis discussed in 2.f above. Further information on the valuations and the sensitivities around the inputs used is given in note 16.

The Board conducts a detailed review of each property valuation to ensure that appropriate assumptions have been applied. The most significant estimates affecting the valuation included yields and estimated rental value ('ERVs'). For development projects, other assumptions including costs to completion and risk premium assumptions are also factored into the valuation. As discussed in 2.f, the Valuer has expressed a material uncertainty due to the impacts of COVID-19. In accordance with the Group's policy on revenue recognition from leases, the valuation provided by C&W is adjusted only by the fair value of the income accruals ensuing from the recognition of lease incentives and the deferral of lease costs. The total reduction in the Valuer's investment property valuation in respect of these adjustments was €8.1m (March 2019: €6.7m).

There were no other significant judgements or key estimates that might have a material impact on the consolidated financial statements at 31 March 2020.

2.h Treatment of tax basis in relation to properties

Asset sales

Following changes to the Irish REIT legislation introduced in October 2019, if a REIT disposes of an asset of its property rental business and does not (i) distribute the gross disposal proceeds to shareholders by way of dividend; (ii) reinvest them into other assets of its property rental business (whether by acquisition or capital expenditure) within a three year window (being one year before the sale and two years after it); or (iii) use the disposal proceeds to repay debt specifically used to acquire, enhance or develop the property sold, then the REIT will be liable to tax at a rate of 25% on 85% of the gross disposal proceeds, subject to having sufficient distributable reserves. No sales of assets of the Group's property rental business have happened since these rule changes took effect in October 2019 and none is currently planned. In addition, the Group has a very substantial development pipeline over the medium term in which to reinvest any sales proceeds. As a result the Group does not anticipate having to pay tax on uninvested sales proceeds for the foreseeable future and no deferred tax has been provided in the Group's accounts relating to this.

Recently completed development assets

Under Irish REIT legislation, assets where the cost of development exceeds 30% of the market value of the asset at the date of commencement of development and which are sold within three years of practical completion of the development could be liable to tax at a rate of 25% on the profits made from the sale. In the case of Hibernia, assets which meet these criteria at the financial year-end are: 1WML (completed in mid-2017), 2WML (completed early 2019) and 1SJRQ (also completed early 2019). In addition, 2 Cumberland Place is under construction and is expected to complete by the end of 2020. All these assets are held for long-term property rental and since none of these assets is expected to be sold within three years of completion, no deferred tax has been provided in the Group's accounts for this eventuality.

Residential assets

Block 3 Wyckham Point (completed in phases during 2015) and Hanover Mills (completed in early 2018): both properties are held for long-term property rental and were developed on this basis. VAT was payable on the acquisition (in the case of Block 3 Wyckham Point only) and on the construction costs for both schemes which has been treated as irrecoverable and recognised as part of the capital costs of both projects. If either property is sold within five years of completion, the Group would be obliged to charge VAT on the sale but would be entitled to a recovery of the VAT incurred on the construction and acquisition costs on an apportioned basis according to the VAT life of each building. As neither property is intended to be sold within the five-year period in the opinion of the Directors, no amendment to the Valuer's valuation of either asset is deemed necessary.

3. Application of new and revised International Financial Reporting Standards ('IFRS')

Changes in accounting standards

The following Standards and Interpretations are effective for the Group from 1 April 2019 but did not have a material impact on the results or financial position of the Group:

IFRS 16Leasesis applicable for annual reporting periods beginning on or after 1 January 2019. IFRS 16 results in almost all leases being recognised on the balance sheet of lessees as it removes the distinction between operating and finance leases for lessees. As the Group is mainly a lessor, the introduction of IFRS 16 on 1 April 2019 had a minimal impact on the Group financial statements. As at the reporting date the Group has no operating leases as a lessee, other than an intercompany lease in relation to the head office, which building is owned by a subsidiary.

Amendments and interpretations which became effective during the year but had no material impact on the Group's financial statements

IFRIC 23 Uncertainty over tax treatments

IFRS 9 Prepayment features with negative compensation

IAS 19 Plan amendment containment or settlement

IAS 28 Long term interests in associates or joint ventures

Annual improvements to IFRS standards 2015-2017 cycle

Standards, amendments, and interpretations in issue but not yet effective nor early adopted

The Directors do not anticipate that these standards or amendments will have any material effect on the Group's financial statements.

IFRS 10 and IAS 28 (amended) Sale or contribution of assets between an investor and its associate or joint venture

Amendments to References to the Conceptual Framework in IFRS Standards (amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32)

Amendment to IFRS 3 Definition of a business

Amendment to IAS 1 and IAS 8 Definition of material

Amendments to IFRS 9 and IAS 39 Interest Rate Benchmark Reform

IFRS 12 Disclosure of Interests in Other Entitiesclarifies the scope of the standard by specifying the disclosure requirements in the standard that apply to an entity's interests that are classified as held for sale, as held for distribution or as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

IAS 28 Long-term Interests in Associates and Joint Venturesclarifies that the election to measure at fair value through profit or loss an investment in an associate or a joint venture that is held by an entity that is a venture capital organisation, or other qualifying entity, is available for each investment in an associate or joint venture on an investment-by-investment basis, upon initial recognition.

These amendments are not expected to have a significant impact on the Group.

Section II - Performance

This section includes notes relating to the performance of the Group for the year, including segmental reporting, earnings per share and Net Asset Value per share as well as specific elements of the consolidated statement of income.

4. Operating segments

4.a Basis for segmentation

The Group is organised into six business segments, against which the Group reports its segmental information. These segments mainly represent the different investment property classes. The Group has divided its business in this manner as the various asset segments differ in their character and returns profiles depending on market conditions and reflect the strategic objectives that the Group has targeted. The following table describes each segment:

Reportable segment	Description
Office assets	Office assets comprise central Dublin completed office buildings, which are either generating rental income or are available to let. Those assets which are multi-tenanted or multi-let are mainly managed by the Group. Income comprises rental income and service charge income, including management fees, while expenses comprise service charge expenses and other property expenses. Where only certain floors of a building are undergoing refurbishment the asset remains in this category.
Office development assets	Office development assets are not currently revenue generating and are the properties that the Group has currently under development in line with its strategic objectives. Development profits, recognised in line with completion of the projects, enhance Net Asset Value ('NAV'), Total Accounting Return ('TAR'), and Total Portfolio Return ('TPR'). Once completed these assets are transferred to the office assets segment at fair value.
Residential assets	This segment contains the Group's completed multi-tenanted residential assets.
Industrial/land assets	This segment contains industrial units and land, which generated some rental income during the financial year.
Other assets	This segment contains other assets that are not part of the previous four strategic operating segments. It originally represented the 'non-core' assets, i.e. those assets identified for resale from loan portfolio purchases
Central assets and costs	Central assets and costs includes the Group head office assets and expenses.

The Board reviews the internal management reports, including budgets, at least quarterly at its scheduled meetings. There is some interaction between reportable segments, for example completed development property is transferred to income-generating segments. These transfers are made at fair value on an arm's length basis using values determined by the Group's Valuer.

4.b Information about reportable segments

The Group's key measure of underlying performance of a segment is total income after revaluation gains and losses, which comprises revenue (rental and service charge income), property outgoings, revaluation of investment properties and other gains and losses. Total income after revaluation gains and losses includes rental income which is used as the basis to report key measures such as EPRA Net Initial Yield ('NIY') and EPRA 'topped-up' NIY. These APMs (detailed in the Supplementary Information section at the back of this report) measure the cash passing rent returns on market value of investment properties before and after an adjustment for the expiry of rent-free period or other lease incentives, respectively.

An overview of the reportable segments is set out below:

Group consolidated segment analysis

For the financial year ended 31 March 2020

	Office assets	Office development assets	Residential assets	Industrial/ land assets	Other assets	Central assets and costs	Group consolidated position
	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Total revenue	59,492	-	7,197	1,241	-	-	67,930
Rental income	53,374	-	7,197	1,241	-	-	61,812
Property operating expenses	(1,905 )	(14 )	(1,289 )	(19 )	-	-	(3,227 )
Net rental and related income	51,469	(14 )	5,908	1,222	-	-	58,585
Operating expenses
Administration expenses	-	-	-	-	-	(12,726)	(12,726)
Expected credit losses on financial assets	(147)	-	-	-	-	-	(147)
Depreciation	-	-	-	-	-	(520)	(520)
Total operating expenses	(147)	-	-	-	-	(13,246)	(13,393)
Operating profit before gains and losses	51,322	(14)	5,908	1,222	-	(13,246)	45,192
Gains and (losses) on investment property	5,494	18,243	4,861	(5,742)	-	-	22,856
Other gains and (losses)	-	-	-	-	25	(15)	10
Operating profit/(loss)	56,816	18,229	10,769	(4,520)	25	(13,261)	68,058
Finance expense	(2,694)	-	-	(115)	-	(4,386)	(7,195)
Profit/(loss) before income tax	54,122	18,229	10,769	(4,635)	25	(17,647)	60,863
Income tax	-	-	-	152	-	28	180
Profit for the financial year attributable to owners of the parent	54,122	18,229	10,769	(4,483)	25	(17,619)	61,043
Total segment assets	1,209,584	48,000	159,969	61,334	534	37,381	1,516,802
Investment property	1,196,925	47,999	159,459	60,800	-	-	1,465,183

For the financial year ended 31 March 2019

	Office assets	Office development assets	Residential assets	Industrial/land assets	Other assets	Central assets and costs	Group consolidated position
	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Total revenue	53,497	-	6,862	1,028	-	-	61,387
Rental income	48,137	-	6,862	1,028	-	-	56,027
Property operating expenses	(1,373)	-	(1,314)	(31)	-	-	(2,718)
Net rental and related income	46,764	-	5,548	997	-	-	53,309
Operating expenses
Administration expenses	-	-	-	-	-	(13,606)	(13,606)
Depreciation	-	-	-	-	-	(284)	(284)
IMA performance-related payments	-	-	-	-	-	(5,401)	(5,401)
Total operating expenses	-	-	-	-	-	(19,291)	(19,291)
Operating profit before gains and losses	46,764	-	5,548	997	-	(19,291)	34,018
Gains and (losses) on investment property	37,837	48,020	13,559	(1,311)	-	-	98,105
Other gains and (losses)	-	-	-	-	-	140	140
Operating profit/(loss)	84,601	48,020	19,107	(314)	-	(19,151)	132,263
Finance expense	(2,861)	-	-	-	-	(5,360)	(8,221)
Profit/(loss) before income tax	81,740	48,020	19,107	(314)	-	(24,511)	124,042
Income tax	-	-	-	(547)	-	(36)	(583)
Profit for the financial year attributable to owners of the parent	81,740	48,020	19,107	(861)	-	(24,547)	123,459
Total segment assets	1,224,888	16,199	153,606	53,144	534	24,141	1,472,512
Investment property	1,173,140	16,199	153,079	53,000	-	-	1,395,418

4.c Geographic information

All of the Group's assets, revenue, and costs are based in Ireland, mainly in central Dublin.

4.d Major customers

The Group monitors its tenants, and in particular its 'top 10' tenants. This is presented below based on contracted rents as at the financial year end. This is concentrated on office tenants as the next major segment, residential, consists mainly of small household tenants and therefore contains no major concentration of credit risk.

The Group's 'top 10' tenants are as follows, expressed as a percentage of contracted office rent:

As at 31 March 2020

Tenant	Business sector	Contracted rent (€'m)	%
HubSpot Ireland Limited	TMT	10.5	18.2%
OPW	Government/state entity	6.0	10.4%
Twitter International Company	TMT	5.1	8.8%
Zalando	TMT	2.9	5.0%
Autodesk Ireland Operations	TMT	2.8	4.9%
Informatica Ireland EMEA	TMT	2.1	3.7%
Riot Games	TMT	2.0	3.4%
Electricity Supply Board	Government/state entity	1.9	3.3%
Travelport Digital Limited	TMT	1.8	3.2%
BNY Mellon Fund Services	Banking and capital markets	1.6	2.8%
Top 10 tenants		36.7	63.7%
Remaining tenants		21.0	36.3%
Whole office portfolio		57.7	100.0%

As at 31 March 2019

Tenant	Business Sector	Contracted Rent (€'m)	%
HubSpot Ireland Limited	TMT	10.5	20.9%
OPW	Government/state entity	6.0	11.9%
Twitter International Company	TMT	5.1	10.1%
Autodesk Ireland Operations	TMT	2.8	5.6%
Informatica Ireland EMEA	TMT	2.1	4.2%
Electricity Supply Board	Government/state entity	1.9	3.7%
Travelport Digital Limited	TMT	1.8	3.6%
BNY Mellon Fund Services	Banking and capital markets	1.6	3.2%
Commission for Communications Regulation	Government/state entity	1.6	3.2%
Core Media	TMT	1.4	2.8%
Top 10 tenants		34.8	69.2%
Remaining tenants		15.6	30.8%
Whole office portfolio		50.4	100.0%

5. Revenue and net rental and related income

Accounting policy

The Group recognises revenue from the following major sources:

- Rental income

- Service charge income

- Other ad-hoc income such as surrender premia and fees from other activities associated with the Group's property business.

Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.

Rental income

Rental income is the Group's major source of income and arises from properties under operating leases. Rental income, including fixed rental uplifts, is recognised in the consolidated income statement on a straight-line basis over the period of the lease until the next break or expiry. All incentives given to tenants under lease arrangements are recognised as an integral part of the net consideration agreed for the use of the leased asset and therefore recognised on the same straight-line basis. Contingent rents, being lease payments that are not fixed at the inception of a lease, such as turnover rents, are recorded as income in the period in which they are earned.

Service charge income

The Group manages the majority of its multi-let buildings under service contracts. These contracts operate for rolling one-year periods over which the Group provides communal services such as security, cleaning, waste and other occupation services to the tenants in its buildings. The tenants pay a service charge, based on the area they occupy, which is collected in advance based on budgeted costs. This income stream is recognised as revenue in accordance with the policy described under property-related income and expense below.

Other income

All other income is recognised in accordance with the following model:

1. Identify the contract with a customer

2. Identify all the individual performance obligations within the contract

3. Determine the transaction price

4. Allocate the price to the performance obligations

5. Recognise revenue as the performance obligations are fulfilled

Property-related income and expenses

Property-related income and expenses comprise service charge income (revenue from contracts with customers) and service charge expenses (costs of goods and services) as well as other property expenses. The Group enters into property management arrangements with tenants as part of its activities. These arrangements constitute a separate performance obligation to the obligations under the rental leases. Buildings with multiple tenants share the costs of common areas and pooled services under these arrangements. The Group manages these costs for tenants and earns a management fee for the provision of shared services on a cost-plus basis. As a landlord, costs of vacant areas are absorbed by the Group and included in other property expenses.

The service charge income stream is accounted for as a single performance obligation which is satisfied over time because the tenant simultaneously receives and consumes the benefits of the Group's activities in providing services under the agreement. Service charge income and expenditure is therefore recognised on an input basis. Tenants reimburse expenses in advance based on budgets with over and under spends reconciled and settled annually. Service charge accounts are maintained for each managed building and the application and management of funds are independently reviewed on the tenants' behalf.

Property operating expenses comprise expenses relating to properties that are not recharged to tenants, i.e. void costs, residential management costs and other related property expenses.

Revenue can be analysed as follows:

	Financial year ended 31 March 2020	Financial year ended 31 March 2019
	€'000	€'000
Gross rental income1	59,937	56,242
Rental incentives	1,875	(215)
Rental income	61,812	56,027
Revenue from contracts with customers2	6,118	5,360
Total revenue	67,930	61,387

1. Gross rental income includes €1.1m relating to variable rents

2. Revenue from contracts with customers is service charge income

Net rental and related income

	Financial year ended 31 March 2020	Financial year ended 31 March 2019
	€'000	€'000
Total revenue	67,930	61,387
Cost of goods and services1	(6,183)	(5,482)
Property expenses	(3,162)	(2,596)
Net rental and related income	58,585	53,309

1. Costs of goods and services are service charge expenses

Further information on the sources and characteristics of revenue and rental income is provided in note 6.

Included in property expenses is an amount of €1.0m (March 2019: €0.5m) relating to void costs on office properties, i.e. costs relating to properties which were available to let but were not income-generating for part of the financial year.

Property operating expenses

	Financial year ended 31 March 2020	Financial year ended 31 March 2019
	€'000	€'000
Service charge income	6,118	5,360
Service charge expenses	(6,183)	(5,482)
Property expenses	(3,162)	(2,596)
Property operating expenses	(3,227)	(2,718)

6. Disaggregation of revenue and rental income

The Group's business is the rental of its investment properties, the development of properties for its investment portfolio and the provision of managed multi-let buildings to its tenants. The Group's revenue consists of rental income, service charge income and other ad-hoc receipts from its property business such as surrender premia. The majority of its contracts are longer-term, with some being 10 years or greater, excluding residential tenancy arrangements which are generally one year in duration. Service charge arrangements are generally provided for under the lease contract but constitute a different performance obligation, the conditions attaching to which are negotiated annually.

Note 4 'Operating segments' discloses the analysis of revenue and income and expense in line with the Group's business model, i.e. by investment property category. In order to complete the disaggregation of revenue by categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors, analyses of the revenue for the period by duration of lease contracts (to next break date) and by tenant industry sector are provided below. Additional information on portfolio characteristics that impact on income is set out in the business review.

Total revenue by duration of lease contract (based on next break date or expiry)

Service charge income is included within the one-year segment as these arrangements, while provided for under the lease contracts, are negotiated on an annual basis. Other income is once-off in nature and is recognised in the one year or less segment, for example rental income on other assets.

Financial year ended 31 March 2020

	One year or less Assets sold Current leases
Lease contracts:			Between one and five years	Greater than five years	Total
	€'000	€'000	€'000	€'000	€'000
Office assets	-	8,379	23,205	27,747	59,331
Office development assets	-	-	-	-	-
Residential assets	-	6,769	428	-	7,197
Industrial/land assets	-	1,307	95	-	1,402
Total segmented revenue	-	16,455	23,728	27,747	67,930

Financial year ended 31 March 2019

	One year or less Assets sold Current leases
Lease contracts:			Between one and five years	Greater than five years	Total
	€'000	€'000	€'000	€'000	€'000
Office assets	2,926	10,360	16,710	23,501	53,497
Office development assets	-	-	-	-	-
Residential assets	-	6,473	389	-	6,862
Industrial/land assets	-	-	698	330	1,028
Total segmented revenue	2,926	16,833	17,797	23,831	61,387

Rental income by tenant industry sector

	31 March 2020		31 March 2019
	€'000	%	€'000	%
Technology, media and telecommunications	27,114	43.9	19,977	35.7
Government/state entity	10,241	16.6	10,362	18.5
Residential	7,197	11.6	6,862	12.2
Banking and capital markets	6,338	10.3	8,501	15.2
Professional services	4,802	7.8	5,276	9.4
Insurance and reinsurance	1,816	2.9	1,246	2.2
Co-working	1,424	2.3	2,230	4.0
Logistics	1,412	2.3	1,028	1.8
Other	1,468	2.3	545	1.0
Rental income	61,812	100	56,027	100

7. Gains and losses on investment property

	Financial year ended 31 March 2020	Financial year ended 31 March 2019
	€'000	€'000
Revaluation of investment property	22,856	95,527
Gains on sale of investment property	-	2,578
Gains and losses on investment property	22,856	98,105

There were no sales of investment property in the financial year. Sales of two properties in the financial year ended

31 March 2019 realised proceeds of €99m and a profit over book value of €2.6m after costs.

8. Administration expenses

Accounting policy

Administration expenses are recognised on an accruals basis in the consolidated income statement.

Operating profit for the financial year has been stated after charging:

		Financial year ended 31 March 2020 €'000	Financial year ended 31 March 2019 €'000
	Notes
Non-Executive Directors' fees		561	447
Staff costs	9	6,829	4,516
Professional fees: property-related		1,100	537
Professional fees: corporate		1,785	2,113
Valuer's fees		285	394
Depository fees		315	299
Depreciation	17	520	284
Other administration expenses		1,851	1,676
'Top-up' internalisation expenses		-	1,482
Prepaid remuneration expense		-	1,139
Administration expenses		13,246	13,890

All fees paid to Non-Executive Directors are for services as Directors of the Company. Non-Executive Directors receive no other benefits. In the prior financial year no benefits other than Directors' fees were received, save for Frank Kenny who earned consultancy fees of €140k (note34.b). Annualised Non-Executive Directors' fees increased from €495k at 31 March 2019 to €625k as at 31 March 2020 due to Margaret Fleming and Grainne Hollywood joining the Board during the financial year.

'Professional fees: property-related' are those incurred in relation to legal and other expenses associated with due diligence on acquisitions which did not proceed, planning consulting in relation to future development projects and other similar expenses relating to property but not directly associated with properties in the Group's portfolio. 'Professional fees: corporate' are various fees relating to legal, internal audit, tax and other consulting services not relating directly to property.

Fees are paid to the Valuer in return for its services in providing independent valuations of the Group's investment properties on an at least twice-yearly basis. The fees are charged on a fixed rate per property valuation. In the prior financial year additional valuation work was carried out for the calculation of the final IMA performance-related amounts and for the refinancing of the revolving credit facility.

Prepaid remuneration expense and, 'top-up' internalisation expenses related to payments to the Vendors of the Investment Manager until the expiry of the IMA on 26 November 2018. In place of the IMA, under which performance-related payments were also payable (and totalled €5.4m in the prior year), a new incentive scheme was introduced: this is the primary reason for the increase in staff costs in the year ended 31 March 2020 (see notes 9 and 10).

Auditor's remuneration (excluding VAT)

Group

	Financial year ended 31 March 2020 €'000	Financial year ended 31 March 2019 €'000
Audit of the Group financial statements	117	113
Other assurance services1	68	72
Tax advisory services	-	-
Other non-audit services	-	-
Total	185	185

1. Other assurance services include the review of the Interim Report and audit of Group subsidiary financial statements. In the financial year ended 31 March 2019 it also included a review of the final IMA performance calculation in early 2019.

9. Employment

The average monthly number of persons (including Executive Directors) directly employed during the financial year in the Group was 35 (March 2019: 33).

Total employees at financial year end:

Group

	Financial year ended 31 March 2020 Number	Financial year ended 31 March 2019 Number
At financial year end:
Administration	27	23
Building management services
Head office staff	4	6
On-site staff	5	5
	9	11
Total employees	36	34

No amount of salaries and other benefits was capitalised into investment properties. Staff costs are allocated to the following expense headings:

The staff costs for the above employees were:

		Financial year ended 31 March 2020 €'000		Financial year ended 31 March 2019 €'000
Wages and salaries (including any cash bonuses)		5,543		4,953
Social insurance costs		644		430
Employee share-based payment expense		1,261		587
Pension costs - defined contribution plan		376		310
Total		7,824		6,280

Staff costs are allocated to the following expense headings:

		Financial year ended 31 March 2020		Financial year ended 31 March 2019
		€'000		€'000
Administration expenses		6,829		4,516
Net property expenses1		995		954
IMA performance-related payments		-		810
Total		7,824		6,280

1. Most of the €995k is recovered directly from tenants via the service charge arrangements within Hibernia managed buildings.

10. Share-based payments

Accounting policy

The Group has a number of share-based payment arrangements in place. These share-based payments are transactions in which the Group receives services in exchange for its equity instruments or by incurring liabilities for cash amounts based on the price of the Group's shares. The equity-settled share-based awards granted under these arrangements are measured at the fair value of the award at the date of grant. The cost of the award is charged to the consolidated income statement over the vesting period of the awards based on the probable number of awards that will eventually vest, with a corresponding credit to shareholders' equity.

The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share-based payment reserve. When these shares vest they are assessed for tax purposes at the current market share price and employee taxes are generally settled through payroll in cash. Employees therefore receive the number of shares net of taxes at vesting date. Share-based payments that are cash-settled are remeasured at fair value at each accounting date. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest.

Movements in share-based payments during the financial year by share-based payment scheme

Summary of share-based payments for financial year ended 31 March 2020

	Balance outstanding at start of financial year		Settled during financial year		Provided during financial year		Balance outstanding at end of financial year
	€'000	'000 Shares	€'000	'000 Shares	€'000	'000 Shares	€'000	'000 Shares
a. Annual bonus	23	17	-	-	335	293	358	310
b. Long-term incentive payments	-	-	-	-	621	411	621	411
c. IMA performance-related payments payable to Vendors	6,069	4,495	(6,107)	(4,519)	38	24	-	-
c. Employee incentives - previous arrangements	1,464	1,087	(635)	(476)	258	158	1,087	769
Total	7,556	5,599	(6,742)	(4,995)	1,252	887	2,066	1,490

Summary of share-based payments for financial year ended 31 March 2019

	Balance outstanding at start of financial year		Settled during financial year		Provided during financial year		Balance outstanding at end of financial year
	€'000	'000 Shares	€'000	'000 Shares	€'000	'000 Shares	€'000	'000 Shares
a. Annual bonus	-	-	-	-	23	17	23	17
c. IMA performance-related payments payable to Vendors	7,332	5,079	(7,334)	(5,079)	6,071	4,495	6,069	4,495
c. Employee incentives - previous arrangements1	1,451	1,104	(551)	(428)	564	411	1,464	1,087
Total	8,783	6,183	(7,885)	(5,507)	6,658	4,923	7,556	5,599

1. This line totals lines 'b. IMA performance-related payments payable to employees' and 'c. Employee long-term incentive plan - interim arrangements' from note 11 in the consolidated financial statements for the year ended 31 March 2019 as included in the Annual Report 2019.

2018 Remuneration Scheme

This scheme was introduced in 2018 and was described in full in the 2018 Annual Report and is available on our website.

Remuneration consists of the following:

1. Basic pay

2. Annual Bonus

3. Long-Term Incentive Plan ('LTIP')

The split between personal and Group performance targets is set depending on an employee's ability to influence Group outcomes, but all employees have an element of Group performance within their targets. We have also started to include sustainability criteria within certain employees targets. All Group employees are eligible to participate in the Annual Bonus scheme while the LTIP applies to Executive Directors and to members of the Senior Management Team other than in exceptional circumstances.

10.a Annual Bonus

	Financial year ended 31 March 2020		Financial year ended 31 March 2019
	€ '000	'000 Shares	€ '000	'000 Shares
Opening balance	23	17	-	-
Movements in amounts provided:
2019 awards	89	60	23	17
2020 awards provision	246	233	-	-
Net amount provided	335	293	23	17
Closing balance	358	310	23	17

Two thirds of any Annual Bonus awarded is usually settled in cash and one third in the grant of shares in the Company, subject to a three-year service condition. The deferred shares awarded under the Annual Bonus are subject only to continued employment. The fair value of the share award is therefore the number of shares granted at the closing share price on the date of grant. An allowance in relation to expected departures is made and the amount amortised over the vesting period. 930k share awards were calculated as potentially due in respect of the financial year ended at 31 March 2020, subject to approval by the Remuneration Committee (March 2019: 214k) . At 31 March 2020, 821k shares remained to be provided for in relation to 2019 and 2020 financial years.

10.b Long-Term Incentive Plan ('LTIP')

The LTIP commenced during the period with the first grant on 31 July 2019. This award consists of nil cost options which vest after three years. Under the LTIP, recipients are granted a variable number of equity instruments depending on market and other conditions as illustrated below.

LTIP conditions	Weighting	Reference	Performance condition type
Service condition		SC	n/a
Relative Total Property Return	33%	TPR	Non-market
Total Accounting Return	33%	TAR	Non-market
Relative Total Shareholder Return	33%	TSR	Market

There is a two-year restricted holding period post vesting, but this is not subject to measurement as all conditions terminate on vesting. The LTIP awards are measured as follows:

Non-market based conditions:The fair value of the shares to be issued is determined using the grant date market price. The expected number of shares is calculated based on the expectations of the number of shares which may vest at the vesting date and amortised over the vesting period. At each accounting date, the calculation of the number of shares is revised according to current expectations or performance. The number of shares is discounted using an estimate of the expected employee departure rate.

Market based condition:The expected performance of Hibernia REIT plc shares over the vesting period is calculated using a Monte Carlo simulation of 10,000 possible outcomes which are then averaged. Inputs are share price volatility for each company and the average growth rate. These inputs are calculated with reference to relevant historic data and financial models. It should be recognised that the assumption of an average growth rate is not a prediction of the actual level of returns that will be achieved. The volatility assumption in the distribution gives a measure of the range of outcomes that may occur on either side of this average value. This is used to amortise the fair value of an expected cost over the vesting period. The service condition is ignored for this calculation but applied in accruing the amounts due. On vesting, any difference in amounts accrued versus actual is amended through reserves.

2019 LTIP

Number of awards granted : 1,853,381

Grant date: 31 July 2019

Grant date share price: €1.51

	Total awards made at maximum vesting	Provided at 31 March 2020
	'000 shares	'000 shares
LTIP dated 31 July 2019	1,853	411
Total LTIP awards as at financial year end	1,853	411

One third of each award made is subject to a relative TSR measure against the constituents of the FTSE EPRA NAREIT Developed Europe Index. One third each is made against TPR and TAR measures. 190k shares were provided for the TPR element as at 31 March 2020, 130k shares were provided against the TAR element based on the performance for the period and 92k shares were provided against the TSR element based on the fair value calculated using a TSR pricing model as described above. Results and inputs are summarised in the table below:

TSR Valuation: 2019 LTIP		31 July 2019 LTIP
Fair value per award (TSR tranche) (€ per share)		1.06
Inputs	Source
Risk free interest rate (%)	European Central Bank	(0.80)
Expected volatility Hibernia (%)	Datastream	17.1
Average comparator volatility (%)	Datastream	18.6
Average comparator correlation (%)	Datastream	20.8
Averaging factors	Datastream	Median 1.01 Hibernia 1.16
Participants receive dividend equivalents so dividend yield is zero	Award certificate

10.c Employee incentives - previous arrangements

	Financial year ended 31 March 2020		Financial year ended 31 March 20191
	€ '000	'000 Shares	€ '000	'000 Shares
Opening balance at start of financial year	1,464	1,087	1,451	1,104
Payment made during the financial year
Shares issued	(150)	(122)	(212)	(163)
Cash-settled share-based payments (taxes)	(163)	(132)	(223)	(177)
Cash-settled share-based payments	(322)	(222)	(116)	(88)
Total cash paid	(485)	-	(339)	-
Total payments in the financial year	(635)	(476)	(551)	(428)
Movements in amounts provided during the financial year
Share-based performance grants recognised2	288	204	583	432
Other amendments	(30)	(46)	(19)	(21)
Net amount provided during the financial year	258	158	564	411
Closing balance at end of financial year	1,087	769	1,464	1,087

1. Prior year information has been summarised to compare with the current financial year.

2. Relates to non-IMA performance related-payments which are recognised over the vesting period.

Investment Management Agreement ('IMA') performance-related payments to Vendors and staff

IMA performance-related payments refer to those payments that were made under the IMA for each financial year and settled mainly in shares of the Company until the expiry of the agreement on 26 November 2018. These arrangements expired with the introduction of the 2018 Remuneration Scheme and no further awards will be due under this arrangement.

All amounts due to the Vendors have been settled during the period with the final issuance of 4.5m shares. There are 0.6m shares outstanding to employees at 31 March 2020 under the IMA agreement for which the final vesting date is 31 March 2021. These shares are forfeited by employees should they leave the Group prior to the vesting date unless subject to 'good leaver' provisions. However shares forfeited are transferable to the Vendors on the basis that these shares have been deducted from performance fees that would otherwise have been due to the Vendors. Therefore there is no impact on fair value measurement from any possible departures relating to these shares.

Employee incentives - interim arrangements

This covered employees who were providing services that were not part of the original IMA. This arrangement expired with the introduction of the 2018 Remuneration Scheme and the final vesting date is 31 March 2021. A total of 0.2m shares are outstanding under this arrangement and these are forfeited should the employee leave the Group prior to the vesting date unless subject to 'good leaver' provisions.

11. Finance income and expense

Accounting policy

Finance expenses directly attributable to the construction of investment properties, which take a considerable length of time to prepare for rental to tenants, are added to the costs of those properties until such time as the properties are substantially ready for use. All other finance expenses and income are recognised in the income statement as they occur using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability (or group of financial assets or financial liabilities) and of allocating the interest income, interest expense and fees paid and received over the relevant period.

The effective interest expense on borrowings arises as a result of the recognition of interest expense, commitment fees and arrangement fees.

	Financial year ended 31 March 2020 €'000	Financial year ended 31 March 2019 €'000
Interest on revolving credit facility	5,230	6,580
Interest on private placement notes	1,894	358
Early amortisation of arrangement fees on refinancing of revolving credit facility	-	1,423
Other finance costs	215	442
Gross finance expense	7,339	8,803
Less: Capitalised interest at an average rate of 2.10% (March 2019: 2.05%)	(141)	(577)
Finance expense	7,198	8,226

Interest costs capitalised in the financial year were €0.1m (March 2019: €0.6m) in relation to the Group's development and refurbishment projects. The capitalisation rate used is the effective interest rate on the cost of borrowing applied to the portion of investment that is financed from borrowings.

In December 2018 the Company refinanced the Group's borrowings (note 26.a). As a result €1.4m relating to unamortised arrangement fees on the previous facility was expensed in accordance with the relevant accounting policy.

12. Income tax expense

Accounting policy

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except insofar as it applies to business combinations or to items recognised in other comprehensive income.

Current tax:Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Hibernia REIT plc has elected for Real Estate Investment Trust ('REIT') status under section 705E Tax Consolidation Act 1997. As a result, the Group does not pay Irish corporation tax on the profits and gains from its qualifying rental business in Ireland provided it meets certain conditions. With certain exceptions, corporation tax is still payable in the normal way in respect of income and gains from a Group's residual business that is, its non-property rental business.

Deferred tax:Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are only recognised where it is probable that the amounts will be recoverable.

Tax changes announced in Finance Act 2019

In the 2020 Budget announced in early October 2019 and the subsequent Finance Act, which came into law in December 2019, a number of changes to the taxation of Irish property were introduced, some of which may directly impact the Group. These included:

- Stamp duty increased from 6% to 7.5% on all commercial property transactions in Ireland

- Increase in the rate of dividend withholding tax ('DWT') from 20% to 25% for all dividends paid by Irish companies

- Where an entity ceases to be a REIT, there will no longer be a deemed disposal and reacquisition of the assets at market value, unless the REIT has been in existence for 15 years or more

- 85% of any proceeds a REIT generates from the sale of a rental property which are not (i) reinvested within a three-year window (spanning one year before and two years afterwards); (ii) used to pay debt specifically used to acquire, enhance or develop that rental property; or (iii) distributed to shareholders within two years of sale (and thus subject to DWT) will be taxed at 25% (an effective rate of 21.25% on the uninvested proceeds)

The Group has no current intentions to cease to be a REIT or to sell any of its investment properties and as a result none of these changes outlined above impacted on current or deferred taxation in the financial year ended 31 March 2020. The increase in stamp duty resulted in a reduction in the valuation of the investment property of approximately €22m.

Reconciliation of the income tax expense for the financial year:

		Financial year ended 31 March 2020 €'000		Financial year ended 31 March 2019 €'000
Profit before tax		60,863		124,042
Tax charge on profit at standard rate of 12.5%		7,608		15,506
Non-taxable revaluation surplus		(2,931)		(11,729)
REIT tax-exempt profits		(4,737)		(3,580)
Other (including additional tax rate on residual income)		(402)		381
Over provision in respect of prior periods		282		5
Income tax expense for the financial year		(180)		583

The Directors confirm that the Group has remained in full compliance with the Irish REIT rules and regulations up to and including the date of this report.

13. Dividends

Accounting policy

Interim dividends are recognised as a liability of the Company when the Board of Directors resolves to pay the dividend and the shareholders have been notified in accordance with the Company's Articles of Association. Final dividends of the Company are recognised as a liability when they have been approved by the Company's shareholders at the AGM.

	Financial year ended 31 March 2020 €'000	Financial year ended 31 March 2019 €'000
Interim dividend for the financial year ended 31 March 2020 of 1.75 cent per share (March 2019: 1.5 cent per share)	11,982	10,465
Proposed final dividend for the financial year ended 31 March 2020 of 3.0 cent per share1 (March 2019: 2.0 cent per share)	20,543	13,884
Total	32,525	24,349

1. Based on shares in issue at close of business at 26 May 2020 of 684.8m.

The Board has proposed a final dividend of 3.0 cent per share (March 2019: 2.0 cent) which is subject to approval by shareholders at the Annual General Meeting to be held on 29 July 2020 and has therefore not been included as a liability in these consolidated financial statements. This dividend is expected to be by early August to shareholders on the register at 3 July 2020. All of this proposed final dividend of 3.0 cent per share will be a Property Income Distribution in respect of the Group's property rental business (March 2019: 2.0 cent). The total dividend, interim paid and final proposed for the financial year ended 31 March 2020 is 4.75 cent per share (March 2019: 3.5 cent per share) or €32.5m (March 2019: €24.3m).

Under the REIT regime, the Company is required to distribute a minimum of 85% of the Group's property rental business profits annually and the Group's dividend policy is to pay out 85-90% of its property rental business profits annually. The Company has complied with this requirement; the total dividends for the year ended March 2020 equate to 85% of EPRA EPS (March 2019: 89%).

14. Earnings per share

There are no convertible instruments, options, or warrants on ordinary shares in issue as at 31 March 2020, other than those dealt with under note 10 above, share-based payments. The Company has established a reserve of €2.1m (March 2019: €7.6m) which is mainly for the issue of ordinary shares relating to the payment of share-based payments. It is estimated that approximately 2.4m ordinary shares (March 2019: 6.0m shares) will be issued in total, 1.5m of which are provided for at 31 March 2020 and a further 0.9m which will be recognised over the next three years. The dilutive effect of these shares is disclosed below.

The calculations are as follows:

Weighted average number of shares

		Financial year ended 31 March 2020	Financialyearended 31 March 2019
	Notes	'000	'000
Issued share capital at beginning of financial year		697,589	692,347
Shares acquired and cancelled during the period		(17,573)	-
Shares issued during the financial year		4,641	5,242
Shares in issue at financial year end	22	684,657	697,589
Weighted average number of shares		688,759	694,968
Number of shares to be issued under share-based schemes		2,375	6,028
Diluted number of shares		691,134	700,996
		Financial year ended 31 March 2020	Financialyearended 31 March 2019
		'000	'000
Number of shares due to issue under share-based schemes recognised at financial year end	10	1,490	5,599
Number of shares due under share-based schemes not recognised at financial year end1		885	429
Number of shares to be issued under share-based schemes		2,375	6,028

1. Included here are all amounts from share-based payments described in note 10 which are either granted at the year-end or shortly after and which have not been recognised at year-end but will be recognised over the next two to three years

Basic and diluted earnings per share (IFRS)

		Financial year ended 31 March 2020	Financial year ended 31 March 2019
		€'000	€'000
Profit/(loss) for the financial year attributable to the owners of the Company		61,043	123,459
		'000	'000
Weighted average number of ordinary shares (basic)		688,759	694,968
Weighted average number of ordinary shares (diluted)		691,134	700,996
Basic earnings per share (cent)		8.9	17.8
Diluted earnings per share (cent)		8.8	17.6

		Financial year ended 31 March 2020	Financial year ended 31 March 2019
EPRA earnings	Notes	€'000	€'000
Profit for the financial year attributable to owners of the parent		61,043	123,459
Adjusted for:
Gains and losses on investment property	16	(22,856)	(98,105)
Profit or loss on disposals of other assets		-	(140)
Deferred tax in respect of EPRA adjustments	26	(152)	547
Changes in fair value of financial instruments and associated close-out costs		58	1,711
EPRA earnings		38,093	27,472
EPRA earnings per share and Diluted EPRA earnings per share		'000	'000
Weighted average number of ordinary shares (basic)		688,759	694,968
Weighted average number of ordinary shares (diluted)	14	691,134	700,996
EPRA earnings per share (cent)		5.5	4.0
Diluted EPRA earnings per share (cent)		5.5	3.9

1. EPRA Earnings per share is an alternative performance measure and is calculated in accordance with the EPRA Best Practice Recommendations Guidelines November 2016. Further information is available in the Supplementary Information section at the end of this statement.

15. IFRS NAV, EPRA NAV per share and Total Accounting Return

The IFRS NAV is calculated as the value of the Group's assets less the value of its liabilities based on IFRS measures. EPRA NAV is calculated in accordance with the European Public Real Estate Association ('EPRA') Best Practice Recommendations: November 2016.

The EPRA NAV per share includes investment property, other non-current asset investments and trading properties at fair value. For this purpose, non-current assets classified as held for sale are included at fair value. It excludes the fair value movement of financial instruments and deferred tax. It is calculated on a diluted basis.

Total Accounting Return ('TAR'), a key performance indicator and alternative performance measure, is calculated as the increase in EPRA NAV per share over the previous financial year end EPRA NAV and adding back dividends per share paid in the financial year, expressed as a percentage.

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
IFRS net assets at end of financial year (€'000)	1,231,149	1,218,539
Ordinary shares in issue ('000)	684,657	697,589
IFRS NAV per share (cent)	179.8	174.7
	'000	'000
Ordinary shares in issue	684,657	697,589
Number of shares to be issued under share-based schemes (see note 14)	2,375	6,028
Diluted number of shares	687,032	703,617
Diluted IFRS NAV per share (cent)	179.2	173.2
	€'000	€'000
IFRS net assets at end of financial year	1,231,149	1,218,539
Deferred tax	395	547
Net mark to market on financial assets	234	288
EPRA NAV	1,231,778	1,219,374
Diluted number of shares ('000)	687,032	703,617
EPRA NAV per share (cent)	179.3	173.3

Total Accounting Return

	As at 31 March 2020	As at 31 March 2019
Opening EPRA NAV per share	173.3c	159.1c
Closing EPRA NAV per share	179.3c	173.3c
Increase in EPRA NAV per share	6.0c	14.2c
Dividends per share paid in financial year	3.8c	3.4c
Total accounting return	9.8c	17.6c
Total accounting return ('TAR')	5.6%	11.1%

Section III - Tangible assets

This section contains information on the Group's investment properties and other tangible assets. All investment properties are fully owned by the Group. The Group's investment properties are carried at fair value and its other tangible assets at depreciated cost except for land and buildings which are adjusted to fair value.

16. Investment property

Accounting policy

Investment properties are properties held to earn rental income and/or for capital appreciation (including property under construction for such purposes). Properties are treated as acquired at the point at which the Group assumes the significant risks and rewards of ownership. This occurs when:

1. It is probable that the future economic benefits that are associated with the investment property will flow to the Group;

2. There are no material conditions which could affect completion of the acquisition; and

3. The cost of the investment property can be measured reliably.

Investment properties are measured initially at cost, including transaction costs. After initial recognition, investment properties are measured at fair value. Gains and losses arising from changes in the fair value of investment properties are included in the consolidated income statement in the period in which they arise.

Investment properties and properties under development are professionally valued on a twice-yearly basis, or as required, by qualified external valuers using inputs that are observable either directly or indirectly for the asset in addition to unobservable inputs and are therefore classified at Level 3. The valuation of investment properties is further discussed above under notes 2.f and 2.g.

The valuations of investment properties and investment properties under development are prepared in accordance with the appropriate sections of the Professional Standards, the Valuation Technical and Performance Standards ('VPS') and the Valuation Applications ('VPGA') contained within the RICS Valuation - Global Standards 2019 ('the Red Book'). It follows that the valuations are compliant with the International Valuation Standards. When the Group begins to redevelop an existing investment property, or property acquired as an investment property, for future use as an investment property the property remains an investment property and is accounted for as such. Expenditure on investment properties is capitalised only when it increases the future economic benefits associated with the property. All other expenditure is charged to the consolidated income statement. Interest and other outgoings, less any income, on properties under development are capitalised. Borrowing costs, that is interest and other costs incurred in connection with borrowing funds, are recognised as part of the costs of an investment property where directly attributable to the purchase or construction of that property. Borrowing costs are capitalised in accordance with the policy described in note 11.

In accordance with the Group's policy on revenue recognition (note 5), the value of accrued income in relation to the recognition of lease incentives under operating leases over the term of the lease is adjusted in the fair value assessment of the investment property to which the accrual relates.

Where amounts are received from departing tenants in respect of dilapidations, i.e. compensation for works that the tenant was expected to carry out at the termination of a lease but the tenant, in agreement with the Group, pays a compensatory sum in lieu of carrying out this work, the Group applies these amounts to the cost of the property. The value of the work to be done is therefore reflected in the fair value assessment of the property when it is assessed at the end of the period.

An investment property is derecognised on disposal, i.e. when the significant risks and rewards of ownership are transferred outside the Group's control, or when the investment property is permanently removed from use and no future economic benefits are anticipated from the disposal. Any gain or loss arising on de-recognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement in the period in which the property is derecognised.

At 31 March 2020

Fair value category		Office assets Level 3 €'000	Office development assets Level 3 €'000	Residential assets Level 3 €'000	Industrial/land assets Level 3 €'000	Total Level 3 €'000
Carrying value at 1 April 2019		1,173,140	16,199	153,079	53,000	1,395,418
Additions:
Property purchases		8,741	-	694	13,385	22,8201
Development and refurbishment expenditure		9,0972	13,557	825	157	23,636
Revaluations included in income statement		5,494	18,243	4,861	(5,742)	22,856
Transferred from property, plant and equipment3		6,210	-	-	-	6,210
Transferred to property, plant and equipment3		(5,757)	-	-	-	(5,757)
Carrying value at 31 March 2020		1,196,925	47,999	159,459	60,8004	1,465,183

1. A VAT refund of €0.5m was accounted for during the financial year arising as a result of the grant of VAT inclusive leases within a redeveloped property in 2DC, following its refurbishment. Gross acquisitions in the financial year therefore €23.3m.

2. This includes capital expenditure on 1WML, SJRQ and 2WML after their transfer to the office segment.

3. The Group moved to a new head office in 1WML in late 2019. The space previously occupied by the Group in South Dock House has been leased to a tenant during the financial year and was transferred to investment property at fair value on the date on which it changed in use.

4. On 9 November 2018 the Group agreed to acquire 92.5 acres adjacent to its holdings in Newlands Cross from the Irish Rugby Football Union (the 'IRFU') for initial consideration of €27m. If rezoning is achieved before November 2028 the IRFU will be due additional consideration equating to 44% of the value of Hibernia's total land interests of 143.7 acres in the Newlands site at re-zoning, less the initial consideration.

At 31 March 2019

	Office assets Level 3 €'000	Office development assets Level 3 €'000	Residential assets Level 3 €'000	Industrial/ land assets Level 3 €'000	Total Level 3 €'000
Fair value category
Carrying value at 1 April 2018	1,017,937	134,500	138,480	17,800	1,308,717
Additions:
Property purchases	2,956	-	980	36,094	40,030
Development and refurbishment expenditure	5,2441	41,500	60	417	47,221
Revaluations included in income statement	35,259	48,020	13,559	(1,311)	95,527
Disposals:
Sales2	(96,077)	-	-	-	(96,077)
Transferred between segments3	207,821	(207,821)	-	-	-
Carrying value at 31 March 2019	1,173,140	16,199	153,079	53,0004	1,395,418

1. This includes capital expenditure on 1WML and 2DLC after their transfer to the office segment in the prior year.

2. New Century House and 77 Sir John Rogerson's Quay were sold or contracted to be sold during the year, generating €2.6m in gains in excess of their carrying values.

3. 2WML (formerly the Hanover Building) and 1SJRQ were transferred from 'Office development assets' to 'Office assets' as they were completed before 31 March 2019.

4. On 9 November 2018 the Group agreed to acquire 92.5 acres adjacent to its holdings in Newlands Cross from the Irish Rugby Football Union (the 'IRFU') for initial consideration of €27m. If rezoning is achieved before November 2028 the IRFU will be due additional consideration equating to 44% of the value of Hibernia's total land interests of 143.7 acres in the Newlands site at re-zoning, less the initial consideration.

There were no transfers between fair value levels during the financial year. Approximately €0.1m of financing costs were capitalised at an effective interest rate of 2.0% in relation to the Group's developments and major refurbishments (March 2019: €0.6m). No other operating expenses were capitalised during the financial year.

Valuations as at 31 March 2020

The valuations used to determine fair value for the investment properties in the consolidated financial statements are determined by the Group's Valuer and are in accordance with the provisions of IFRS 13. C&W has agreed to the use of its valuations for this purpose. As discussed in notes 2.f and 2.g, property valuations are inherently subjective as they are made on the basis of assumptions made by the Valuer and therefore are classified as Level 3. At the valuation date, the Valuer has reported on the basis of a material uncertainty as per VPS 3 and VPGA 10 of the RICS Red Book Global. This is not intended by the Valuer to suggest that its valuations cannot be relied on but to indicate that less certainty - and a higher degree of caution - should be ascribed to the valuations than would normally be the case.

Valuations are completed on the Group's investment property portfolio on at least a half-yearly basis and, in accordance with the appropriate sections of the Professional Standards, the Valuation Technical and Performance Standards ('VPS') and the Valuation Practice Applications ('VPGA') contained within the RICS Valuation - Global Standards 2019 ('the Red Book'). It follows that the valuations are compliant with the International Valuation Standards. Fair value under IFRS 13 is 'the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date'. The Red Book confirms that the references in IFRS 13 to market participants and a sale make it clear that for most practical purposes fair value is consistent with market value.

The method that is applied for fair value measurements categorised within Level 3 of the fair value hierarchy is the yield methodology using market rental values capitalised with a market capitalisation rate or yield or other applicable valuation technique. Using this approach for the Group's investment properties, values of investment properties are arrived at by discounting forecasted net cash flows at market derived capitalisation rates. This approach includes future estimated costs associated with refurbishment or development, together with the impact of rental incentives allowed to tenants. Thus development properties are assessed using a residual method in which the completed development property is valued using income and yield assumptions and deductions are made for the estimated costs to complete, including finance costs and developers' profit, to arrive at the current valuation estimate. In effect, this values the development as a proportion of the completed property.

In the financial year ended 31 March 2020, for most properties the highest and best use is the current use except as discussed in note 2.f. In these instances, the Group may need to achieve vacant possession before redevelopment or refurbishment may take place and the valuation of the property takes account of any remaining occupancy period on existing leases. The table below summarises the approach for each investment property segment and highlights properties where the approach has been varied in this financial year.

The following table illustrates the methods applied to each segment:

Description of investment property asset class	Fair value of the investment property €'m	Narrative description of the techniques used		Changes in the fair value technique during the financial year
Office assets	1,197	Yield methodology using market rental values capitalised with a market capitalisation rate. Exceptions to this: · Harcourt Square is valued on an investment basis until the end of the current lease (2022) and on a residual basis thereafter. · Marine House and Clanwilliam Court Blocks 1, 2 and 5 are valued on an investment basis until the end of the current leases (which expire over the period 2020 and 2022) and on a residual basis thereafter.		· The calculation of the GDV for office development assets (residual appraisals and therefore for the pipeline assets listed opposite) now values the net effective rent into perpetuity, whilst the 'froth income' (difference between headline rent and net effective rent) is valued for the first five years of the lease (after allowing for a void/rent free period) to the assumed first rent review date. Previously, the headline rent was valued into perpetuity after deduction of a void/rent free period
Office development assets	48	Residual method, i.e. Gross Development Value less Total Development Cost less Profit equals Fair Value · Gross Development Value ('GDV'): the fair value of the completed proposed development (arrived at by capitalising the market rent or Estimated Rental Value ('ERV') with an appropriate yield, allowances for purchasers' costs, assumptions for voids and/or rental free periods). The appropriate yield is based on the Valuer's opinion of the most likely tenant covenant achievable for the property and the most likely lease terms · Total Development Cost ('TDC'): this includes, but is not limited to, construction costs, land acquisition costs, professional fees, levies, marketing costs and finance costs · Developer's profit which is measured as a percentage of the total development costs (including the site value). It also takes account of letting risk For developments close to completion the yield methodology is usually applied.		· 2 Cumberland Place is now closer to practical completion and significant progress has been made on lettings, with part of the building pre-let shortly after the financial year end. Therefore, the valuation methodology has changed from a residual valuation to an investment valuation. Outstanding capital expenditure has been deducted to arrive at the final valuation
Residential assets	159	Yield methodology using rental values capitalised with a market capitalisation rate. Alternatively, the comparable sales method of valuation is used to value some residential assets.		No change in valuation technique.
Industrial/land assets	61	Yield methodology using market rental values capitalised with a market capitalisation rate. The Newlands site, including the Gateway industrial park is valued as an early stage development site on a price per acre basis. Properties in Dublin Industrial Estate and Malahide Road Industrial Estate are valued using market rental values capitalised with a market capitalisation rate. The values are benchmarked to capital values per sq. ft. to take account of their current condition and development potential.		No change in valuation technique.

EPRA capital expenditure

Capital expenditure ('capex') during the financial year is analysed below according to the EPRA Best Practice Recommendation Guidelines. The tables below comply with the 2016 and 2019 recommendations. All amounts are from the IFRS financial statements of the Group without adjustment and are reconciled below.

1. Acquisitions: amounts spent for the purchase of investment properties including purchase costs capitalised

2. Developmentamounts spent on investment properties under construction and related project costs capitalised, including internal costs allocated

3. Investment properties: amounts spent on the completed operational portfolio including:

a. Incremental lettable area: amounts spent to add additional lettable space to 'in-place' investment property

b. No incremental lettable space: amounts spent to enhance the property without increasing lettable areas

c. Tenant incentives: any amounts spent on the investment property as incentive for tenants

4. Capitalised interest: capitalised finance costs which are added to the carrying value of investment properties

The Group has no joint ventures; all of its properties are located in the Dublin area. Expenditure is therefore analysed into portfolio property type only.

	As at 31 March 2020
	Office assets €'000	Office development assets €'000	Residential assets €'000	Industrial/land assets €'000	Total €'000
Acquisitions	8,741	-	694	13,385	22,8201
Development2	7,787	13,416	-	-	21,203
'In-place' investment properties
Incremental lettable space	-	-	-	-	-
No incremental lettable space	(446)3	-	825	-	379
Tenant incentives	-	-	-	-	-
Expenditure on properties due for re-development/refurbishment	1,756	-	-	157	1,913
Other material non-allocated types of expenditure	-	-	-	-	-
	17,838	13,416	1,519	13,542	46,315
Capitalised interest4	-	141	-	-	141
Total CapEx	17,838	13,557	1,519	13,542	46,456
Conversion from accrual to cash basis	(173)	2,001	(220)	(123)	1,485
Total CapEx on cash basis	17,665	15,558	1,299	13,419	47,941

1. A VAT refund of €0.5m was accounted for during the financial year arising as a result of the grant of VAT inclusive leases within a redeveloped property in 2DC, following its refurbishment. Gross acquisitions in the financial year therefore €23.3m.

2. Capital expenditure relating to development or major refurbishment of 1SJRQ, 1&2WML, and 2 Cumberland Place.

3. Dilapidation payments were received from vacating tenants and have been netted with capital expenditure.

4. Financing expenses capitalised and expenditure on existing properties in relation to future planning for redevelopment.

31 March 2019

	Office assets €'000	Office development assets €'000	Residential assets €'000	Industrial/land assets €'000	Total €'000
Acquisitions	2,956	-	980	36,094	40,030
Development1	3,094	41,496	-	-	44,590
'In-place' investment properties
Incremental lettable space	-	-	-	-	-
No incremental lettable space	(103)2	-	60	-	(43)
Tenant incentives	-	-	-	-	-
Expenditure on properties due for re-development/refurbishment	1,679	-	-	417	2,096
Other material non-allocated types of expenditure	-	-	-	-	-
	7,626	41,496	1,040	36,511	86,673
Capitalised interest3	574	4	-	-	578
Total CapEx	8,200	41,500	1,040	36,511	87,251
Conversion from accrual to cash basis	503	(1,220)	190	123	(404)
Total CapEx on cash basis	8,703	40,280	1,230	36,634	86,847

1. Capital expenditure relating to development or major refurbishment of 1SJRQ, 1&2WML, and 2 Cumberland Place.

2. Dilapidation payments were received from vacating tenants and have been netted with capital expenditure.

3. Financing expenses capitalised and expenditure on existing properties in relation to future planning for redevelopment.

Reconciliation of the Valuer's valuation report amount to the carrying value of investment property in the consolidated statement of financial position:

			As at 31 March 2020	As at 31 March 2019
			€'000	€'000
Valuation per Valuer's certificate			1,480,360	1,407,740
Owner-occupied (note 17)			(7,089)	(5,643)
Income recognition adjustment1			(8,088)	(6,679)
Investment property balance at end of period			1,465,183	1,395,418

1. Income recognition adjustment: this relates to the difference in valuation that arises as a result of property valuations using a cash flow based approach while income recognition for accounting purposes spreads tenant incentives and lease related costs over the lease term.

Information about fair value measurements using unobservable inputs (Level 3)

The valuation techniques used in determining the fair value for each of the categories of assets is market value as defined by VPS 4 of the Red Book 2019, 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, and is in accordance with IFRS 13. Included in the inputs for the valuations above are future development costs where applicable and sensitivity data is provided on these.

As outlined above, the main inputs in using a market-based capitalisation approach are the ERV and equivalent yields. ERVs, apart from in multi-family residential properties, are not generally directly observable and therefore classified as Level 3. Yields depend on the Valuer's assessment of market capitalisation rates and are therefore Level 3 inputs. The tables below summarise the key unobservable inputs used in the valuation of the Group's investment properties at 31 March 2020. There are interrelationships between these inputs as they are both determined by market conditions and the valuation result in any one period depends on the balance between them. The Group's residential properties are mainly multi-family units and therefore ERVs are based on current market rents observed for units rented within the property. ERV is included in the below table for completeness.

Key unobservable inputs used in the valuation of the Group's investment property

31 March 2020

	Market value	Estimated rental value		Equivalent yield
	€'000	Low	High	Low	High
Office	1,196,925	€25.00psf	€62.50psf	3.99%	6.65%
Office development	47,999	€30.00psf	€62.00psf	4.42%	4.42%
Residential1	159,459	€25,200pa	€32,400pa	3.70%	5.06%
Industrial/land	60,800	€5.00psf	€9.00psf	7.65%	7.94%

1. Average ERV based on a two-bedroom apartment. Residential yields are based on the contracted income after deducting operating expenses. The market standard deduction is 20% of gross rental income. Based on the Value's estimation of market rent no deduction for operating expenses (as per 31 Mar-19 below), the gross yields on the same assets as noted at 31 Mar-19 would be 5.28% (low) and 6.37% (high).

31 March 2019

	Market value €'000	Estimated rental value Low High		Equivalent yield Low High
Office	1,173,140	€15.00psf	€60.00psf	4.04%	7.30%
Office development	16,199	€30.00psf	€57.50psf	4.75%	4.75%
Residential1	153,079	€23,400pa	€31,800pa	5.16%	6.00%
Industrial/land	53,000	€5.25psf	€9.25psf	8.02%	8.02%

1. Average ERV based on a two-bedroom apartment. Residential yields are gross yields based on the Valuer's estimation of market rent no deduction for operating expenses.

Sensitivity data

The sensitivities below illustrate the impact of movements in key unobservable inputs on the fair value of investment properties. These are ERV, equivalent yields and development construction costs (residual appraisals). To calculate these impacts only the movement in one unobservable input is changed as if there is no impact on the other. In reality there may be some impact on yields from an ERV shift and vice versa. However, this gives an assessment of the maximum impact of shifts in each variable. The tables illustrate the impacts from a 5% or 10% ERV and a 25bp or 50bp shift in equivalent yield on the valuations as included in the consolidated financial statements at 31 March 2020 and 31 March 2019.

ERV and equivalent yields

31 March 2020

	Impact on market value of a 5% change in the estimated rental value		Impact on market value of a 10% change in the estimated rental value		Impact on market value of a 25bp change in the equivalent yield		Impact on market value of a 50bp change in the equivalent yield
Sensitivities	Increase €'m	Decrease €'m	Increase €'m	Decrease €'m	Increase €'m	Decrease €'m	Increase €'m	Decrease €'m
Office	58.6	(58.6)	116.9	(116.9)	(83.4)	93.2	(158.3)	198.7
Office development	2.8	(2.8)	5.7	(5.7)	(3.8)	4.3	(7.3)	9.2
Residential	8.0	(8.0)	15.8	(15.8)	(9.9)	11.2	(18.6)	24.1
Industrial/land	0.3	(0.3)	0.6	(0.6)	(0.3)	0.3	(0.5)	0.6
Total	69.7	(69.7)	139.0	(139.0)	(97.4)	109.0	(184.7)	232.6

31 March 2019

	Impact on market value of a 5% change in the estimated rental value		Impact on market value of a 10% change in the estimated rental value		Impact on market value of a 25bp change in the equivalent yield		Impact on market value of a 50bp change in the equivalent yield
Sensitivities	Increase €'m	Decrease €'m	Increase €'m	Decrease €'m	Increase €'m	Decrease €'m	Increase €'m	Decrease €'m
Office	52.6	(53.7)	111.7	(111.7)	(72.8)	80.2	(143.3)	179.3
Office development	1.9	(2.0)	3.9	(3.9)	(2.1)	2.2	(4.0)	4.8
Residential	7.5	(7.5)	14.9	(14.9)	(8.2)	12.1	(17.6)	21.3
Industrial/land	0.1	(0.1)	0.2	(0.2)	(0.1)	0.1	(0.3)	0.3
Total	62.1	(63.3)	130.7	(130.7)	(83.2)	94.6	(165.2)	205.7

Development construction costs

A 5% decrease or increase in construction costs would result in a decrease or increase in the total value of the portfolio of €10m as at 31 March 2020 (31 March 2019: €8m). Development construction costs are an unobservable input to residual appraisals which are used in valuing those properties that are pipeline development assets.

17. Property, plant and equipment

Accounting policy

Owned property which is occupied by the Group for its own purposes is derecognised as investment property at the date occupation commenced and recognised as owner-occupied property within property, plant and equipment at its fair value at that date. Similarly, property which ceases to be occupied by the Group is derecognised as property, plant and equipment and recognised as investment property at fair value on the date of change of use. Property used for administration purposes is stated in the consolidated statement of financial position at its revalued amount. Revaluations are performed with sufficient regularity such that the carrying amounts do not differ materially from those that would be determined using fair values at the end of each accounting period.

Any revaluation increase from this property is recognised in other comprehensive income and accumulated in equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously expensed. A decrease in the carrying amount of this property arising on revaluation is recognised in profit or loss to the extent that it exceeds the balance, if any, held in the property's revaluation reserve relating to a previous revaluation of that asset. On derecognition, the accumulated reserve for that property remains in reserves until the asset is either sold or decommissioned, at which date the accumulated reserve relating to that asset is released directly to revenue reserves.

Depreciation on revalued property is recognised in profit or loss. On the subsequent sale or retirement of a revalued property, the attributable revaluation reserve is transferred directly to retained earnings.

Fixtures and fittings are stated at cost less accumulated depreciation and impairment losses.

Depreciation is recognised to write off the cost or value of assets less their residual value over their useful lives. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The estimated useful lives for the main asset categories are:

Land and buildings	50 years
Fixtures and fittings/leasehold improvements	5 years
Office and computer equipment	3 years

As at 31 March 2020

	Land and buildings	Office and computer equipment	Leasehold improvements and fixtures and fittings	Total
	€'000	€'000	€'000	€'000
Cost or valuation
At 1 April 2019	5,942	207	596	6,745
Additions:
Purchases	366	71	1,649	2,086
Transferred from investment property1	5,757	-	-	5,757
Disposals:
Sales2	-	(107)	(598)	(705)
Transferred to investment property1	(6,568)	-	-	(6,568)
Revaluation recognised in other comprehensive income	1,658	-	-	1,658
At 31 March 2020	7,155	171	1,647	8,973
Depreciation
At 1 April 2019	(299)	(152)	(392)	(843)
Charge for the financial year	(125)	(35)	(360)	(520)
Disposals	-	87	576	663
Transferred to investment property1	358	-	-	358
At 31 March 2020	(66)	(100)	(176)	(342)
Net book value at 31 March 2020	7,089	71	1,471	8,631

1. The Group relocated its head office from South Dock House to 1WML during the financial year. South Dock House has now been leased to a tenant and so is recognised in investment property. The space in 1WML now occupied by the Group has now been recognised in land and buildings as owner occupied property.

2. Disposals relate to furniture and fittings in South Dock House.

At 31 March 2019

	Land and buildings €'000	Office and computer equipment €'000	Leasehold improvements and fixtures and fittings €'000	Total €'000
Cost or valuation
At 1 April 2018	5,219	161	590	5,970
Additions	-	46	6	52
Revaluation recognised in other comprehensive income	723	-	-	723
At 31 March 2019	5,942	207	596	6,745
Depreciation
At 1 April 2018	(190)	(104)	(265)	(559)
Charge for the financial year	(109)	(48)	(127)	(284)
At 31 March 2019	(299)	(152)	(392)	(843)
Net book value at 31 March 2019	5,643	55	204	5,902

Land and buildings: The Group's head office at 1WML was revalued at 31 March 2020, and the Group's previous head office at South Dock House was revalued at 31 March 2019, by the Group's Valuer and in accordance with the valuation approach described under note 16. They were measured at fair value at the period end using a yield methodology using market rental values capitalised with a market capitalisation rate. These fair value measurements use significant unobservable inputs. The inputs used are disclosed in the table below.

Valuation inputs		31 March 2020 1WML		31 March 2019 South Dock House
ERV per sq. ft.		€55.0		€57.5
Equivalent yield		4.25%		5.0%

18. Other assets

Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.

These are property assets which were acquired as part of a loan portfolio purchased to acquire some of the Group's investment properties and are not suitable for retention as investment property. Previously they were recognised as non-current assets held for sale. A profit of €5m has been realised on the disposal of these assets to date and the Directors have concluded that the fair value of the remaining assets is at least their carrying value. The sale of the remaining assets has been delayed and the Directors have concluded that it is more appropriate that they be recognised as non-current.

Section IV - Financing including equity and working capital

This part focuses on the financing of the Group's activities, including the equity capital, bank borrowings and working capital. It also covers financial risk management.

Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability of another entity. The Group has identified financial assets and liabilities in its financial position and the accounting policy for these is summarised in this note. Financial instruments may be further analysed between current and non-current depending on whether these will fall due within 12 months after the balance sheet date or beyond.

Financial assets:This classification depends on the business model and the contractual terms of the cash flows. Financial assets that are held to collect contractual cash flows where those cash flows represent solely payments of principal or interest are measured at amortised cost. Financial assets measured at amortised cost are principally trade receivables. At initial recognition the Group measures the financial assets at fair value plus (except for those at fair value through profit or loss) transaction costs.

On initial recognition the Group classifies its financial assets in the following measurement categories:

· Those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss)

· Those to be measured subsequently at amortised cost.

The Group's financial assets comprise trade and other receivables, loans receivable and derivative instruments. The Group de-recognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. On de-recognition of a financial asset, the difference between the carrying amount of the asset and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss. Relevant costs incurred with the disposal of a financial asset are deducted in computing the gain or loss on disposal.

Financial liabilities:These are initially recognised at the fair value of the considerations received less directly attributable transaction costs. Subsequent to initial recognition, financial liabilities are recognised at amortised cost. The difference between the recognition value and the redemption value is recognised in the income statement over the contractual terms using the effective interest rate method. This category includes trade and other payables and borrowings. Financial liabilities are derecognised in full when the Group is discharged from its obligation, they expire, or they are replaced by a new liability with substantially modified terms.

The Group's non-equity financing is all unsecured and comprises a revolving credit facility and private placement notes. The majority of this debt is fixed rate or hedged through derivatives to protect against major rises in interest rates.

Effective interest method:The Group uses the effective interest method of calculating the amortised cost of a debt instrument and of allocating interest income and expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or liability, or, where appropriate, a shorter period, to the gross carrying amount of a financial asset or the amortised cost of a financial liability.

Impairment of financial assets:The Group recognises a loss allowance for expected credit losses on debt instruments, trade receivables and other financial assets. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. IFRS 9 allows entities to apply a 'simplified approach' for trade receivables, contract assets and lease receivables. The simplified approach must be used for trade receivables with no significant financing approach and the Group has chosen to apply this to all trade receivables as only some minor receivables have a financing component. The simplified approach allows the recognition of lifetime ECL on all these assets without the need to identify significant increases in credit risk (see note 21). Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. The Group uses a provision matrix to calculate these ECL.

In order to perform this assessment, the Group classifies its assessment into three stages:

· Step 1: Group trade receivables: The Group has chosen to use a tenant risk assessment which is based on the tenant's industry, its knowledge of its payment history and other factors as relevant to group financial assets into credit risk categories.

· Steps 2 to 4: The Group uses the period since inception to gather loss data. As only minor losses have occurred, the Group has used forward looking economic factors to determine appropriate loss rates to apply to each sub-group determined in step 1 as divided into past due categories, thus creating a matrix for provision of ECL.

· Stage 5: The ECL for each sub-group determined in step 1 is calculated by multiplying the loss rate calculated in steps 2 to 4 to the balance of each age-band for the receivables in each group. Once the expected credit losses of each age-band for the receivables have been calculated, total expected credit loss of the portfolio is provided.

A financial asset is considered to be credit-impaired where payments are past due and there is no engagement with the Group to make arrangements to bring the payment schedule up to date. A financial asset is considered to be in default if the debtor has failed to pay all rent and other charges due for a period of three months, has failed to agree payment terms for the clearance of the balance and there are no legal grounds for suspended payment or the debtor has failed to engage or has moved out of the property and is considered a high-risk debtor. Each circumstance is individual and Management may use discretion when deciding if such amounts are recoverable. Rent continues to be recognised in rental income, with the appropriate ECL being recognised, until the financial asset is considered to be in default. Once in default, these amounts are still due but not recognised in profit or loss. Amounts considered to be in default are full impaired. When legal proceedings are instigated to recover the debt, the costs of these are charged to profit or loss.

19. Cash and cash equivalents

	As at 31 March 2020 €'000	As at 31 March2019 €'000
Cash and cash equivalents	28,454	22,372

Cash and cash equivalents includes cash at bank in current accounts and deposits held on call with banks. The management of cash and cash equivalents is discussed in note 30. Please also refer to note 25.b on the net debt calculations. In addition, the Company holds funds in excess of its regulatory minimum capital requirement at all times. Given the impact of COVID-19, the Group has implemented a policy of maintaining a minimum cash balance of €20m at all times.

20. Other financial assets

Accounting policy

Derivatives:The Group utilises derivative financial instruments to hedge interest rate exposures on its borrowings. Derivatives designated as hedges against interest risks are accounted for as cash flow hedges. Hedge relationships are documented at inception. This documentation identifies the hedge, the item being hedged, the nature of the risks being hedged and how the effectiveness is measured during its duration. Hedges are measured for effectiveness at each accounting date and the accounting treatment of changes in fair value revised accordingly. The Group's cash flow hedges are against variability in interest costs and the effective portion is recognised in equity in the hedging reserve, with the ineffective portion being recognised in profit or loss within finance expenses.

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Derivatives at fair value	34	194

Cash flow hedges are the Group's hedging instruments on its borrowings. The Group has a policy of having the majority of its interest rate exposure on its debt hedged or fixed. As at 31 March 2020, as well as having €75m of fixed coupon private placement notes, it has hedged the interest rate exposure on €125m of its revolving credit facility (March 2019: €225m) using a combination of caps and swaptions to limit the EURIBOR element of interest payable to 0.75%. This means that at 31 March 2020 76% of the Group's drawn debt is either fixed or hedged (31 March 2019: 128%)

21. Trade and other receivables

Accounting policy

Trade and other receivables are initially recognised when they are originated. Trade and other receivables that do not contain significant financing components, which is assessed at initial recognition, are measured at the transaction price. Trade receivables that are held within a business model where the objective is to hold the financial asset in order to collect cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest are recognised at fair value at the recognition date and subsequently measured at amortised cost using the effective interest rate method.

For trade receivables which are financial assets the accounting policy is described under Section IV above.

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Non-current
Property income receivables	9,590	7,163
Recoverable capital expenditure	661	765
Expected credit loss allowance	(36)	-
Balance at end of period - non-current	10,215	7,928
Current
Property income receivables	1,955	4,105
Recoverable capital expenditure	460	314
Expected credit loss allowance	(61)	-
	2,354	4,419
Receivable from investment property sales	136	34,639
Deposits paid on investment property	-	145
Prepayments	985	548
Income tax refund due	2	54
VAT refundable	274	359
Balance at end of period - current	3,751	40,164
Balance at end of period - total	13,966	48,092
Of which are classified as financial assets	1,591	37,630

The non-current balance is mainly non-financial in nature; €0.7m (March 2019: €0.8m) relates to amounts receivable from tenants in relation to capital expenditure funded initially by the Group to be recovered over the relevant lease term, with the balance consisting of deferred income and expenditure amounts relating to the lease incentives and deferred lease costs. These amounts, as they are receivable over the term of the lease, have a financing element. The Group has chosen to apply the simplified expected credit loss model to these. The Group introduced an internal rating system for tenants during the COVID-19 pandemic in order to ensure proactive management of amounts due. The Group has a diverse range of tenants, many of which are large multinational companies, and our rent collection statistics have remained strong (note 2.e).The current balance of trade and other receivables has no concentration of credit risk as it comprises mainly prepayments (note 30.d). The expected credit loss allowance is calculated according to the provision matrix and totals €97k. In addition, expected credit losses of €50k were realised in the year.

22. Issued capital and share premium

Accounting policy

The equity of the Company consists of ordinary shares issued. Shares issued are recorded at the date of issuance. The par value of the issued 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.

At 31 March 2020

	No. of shares in issue	Share capital	Share premium	Capital redemption fund	Total Company capital
	'000	€'000	€'000	€'000	€'000
Balance at beginning of period	697,589	69,759	624,483	-	694,242
Shares cancelled during the period (see below)	(17,573)	(1,757)	-	1,757	-
Shares issued during the period (see below)	4,641	464	5,793	-	6,257
Balance at end of period	684,657	68,466	630,276	1,757	700,499

At 31 March 2019
	No. of shares in issue '000	Share capital €'000	Share premium €'000	Total Company capital €'000
Balance at beginning of period	692,347	69,235	617,461	686,696
Shares issued during the period (see below)	5,242	524	7,022	7,546
Balance at end of period	697,589	69,759	624,483	694,242

Shares cancelled during the period - share buyback programme:

In April 2019 the Group announced an on-market share buyback programme to return up to €25m of the proceeds from the sale of 77 Sir John Rogerson's Quay to shareholders. This commenced in April 2019 and completed in November 2019 with a total of 17.6m shares repurchased and immediately cancelled for aggregate consideration of €25.0m (average price €1.42).

Shares issued during the period are as follows:

4.6m ordinary shares with a nominal value of €0.10 were issued during the period in settlement of share-based payments totalling €6.2m (note 10): 0.1m shares were issued on 4 April 2019 and 4.5m shares were issued on 24 July 2019 and the associated costs were €10k.

Share-based payments:

The Group's remuneration scheme includes awards which are made in shares or nil cost share options and which are payable to employees only after fulfilling service and/or performance conditions. Amounts provided for at 31 March 2020 were 1.5m shares and a further 0.9m shares remain to be accrued as at the period end. Amounts due at 31 March 2019 amounted to €7.6m or 5.6m shares and 0.4m shares remained to be provided. Full details on these arrangements are in note 10.

Share capital:

Ordinary shares of €0.10 each:

	Financial year ended 31 March 2020 '000 of shares	Financial year ended 31 March 2019 '000 of shares
Authorised	1,000,000	1,000,000
Allotted, called up and fully paid	684,657	697,689
In issue at end of financial year	684,657	697,589

There are no shares issued which are not fully paid.

Share premium:

On 23 May 2019 the Group announced its intention to undertake a share capital reorganisation to convert part of its share premium into distributable reserves. A resolution was passed at the Group's AGM on 31 July 2019 approving this reorganisation. The reorganisation proceeded in January 2020, and the conversion of €50m in share premium to revenue reserves was approved by the High Court in March 2020 and took effect in April 2020.

23. Other reserves

		As at 31 March 2020 €'000	As at 31 March 2019 €'000
Property revaluation		3,547	1,889
Cash flow hedging		(234)	(288)
Share-based payment reserve		2,066	7,556
Balance at end of period		5,379	9,157

23.a Property revaluation reserve

		As at 31 March 2020 €'000	As at 31 March 2019 €'000
Balance at beginning of period		1,889	1,166
Increase arising on revaluation of properties		1,658	723
Balance at end of period		3,547	1,889

The Group's head office is carried at fair value and the remeasurement of this property is made through other comprehensive income or loss (note 16). If disposed of, the property revaluation reserve relating to the premises sold will be transferred directly to retained earnings. The Group moved head office during the financial year and €2.5m of the balance on this reserve relates to unrealised gains on South Dock House for the period during which it was the Group's head office.

23.b Cash flow hedging reserve

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve is reclassified to profit or loss when the hedged transaction affects the profit or loss consistent with the Group's accounting policy.

No income tax arises on this item.

Cumulative gains or losses arising on changes in fair value of hedging instruments that have been tested as ineffective and reclassified from equity into profit or loss during the period are included in the following line items:

		As at 31 March 2020 €'000	As at 31 March 2019 €'000
Balance at beginning of period		(288)	(329)
Net fair value movement on hedging instruments entered into for cashflow hedges		54	41
Balance at end of period		(234)	(288)

23.c Share-based payment reserve

		As at 31 March 2020 €'000	As at 31 March 2019 €'000
Balance at beginning of period		7,556	8,783
Performance-related payments provided		1,252	6,658
Settlement of performance-related payments		(6,742)	(7,885)
Balance at end of period		2,066	7,556

The share-based payment reserve comprises amounts reserved for the issue of shares in respect of variable remuneration. These are discussed further in note 10.

24. Retained earnings, distributable reserves and dividends on equity instruments

Retained earnings

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Balance at beginning of financial year	515,140	415,414
Profit for the financial year	61,043	123,459
Share issuance	(10)	(14)
Share buy-back	(25,036)	-
Dividends paid	(25,866)	(23,719)
Balance at end of financial year	525,271	515,140

Distributable reserves - Company only

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Retained earnings at end of financial period (Company only)	444,022	436,014
Unrealised gains on investment property1	(408,513)	(388,791)
Distributable earnings after post period end dividends	35,509	47,223

1. Unrealised intercompany profits arising on the transfer of investment properties to subsidiaries of the Company have been eliminated for the purpose of the above calculation

In August 2019 a dividend of 2.0 cent per share (€13.9m) and in January 2020 an interim dividend of 1.75 cent per share (€12.0m) were paid to the holders of fully paid ordinary shares. A final dividend for the financial year of 3 cent per share (c. €20.5m) has been proposed (31 March 2019: 2.0 c per share or € 13.9m) (note 13).

On 9 April 2020 €50m in share premium was converted to distributable reserves on foot of a capital reorganisation which took place during the financial year (note 22).

The Directors confirm that the Company continues to comply with the dividend payment obligations contained within the Irish REIT legislation.

25 Financial liabilities

Accounting policy

A financial instrument is classified as a financial liability where it contains an obligation to repay. These are accounted for at amortised cost. Financial liabilities that are classified as amortised cost are initially measured at fair value minus any transaction costs. Accounting at amortised cost means that any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss or capitalised into investment property over the period of the borrowings using the effective interest method (see Section IV introduction).

25.a Borrowings

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Non-current
Unsecured bank borrowings	185,109	156,524
Unsecured private placement notes	74,582	74,524
Total non-current borrowings	259,691	231,048
Current
Unsecured bank borrowings	159	149
Unsecured private placement notes	358	358
Total current borrowings	517	507
Total borrowings	260,208	231,555
The maturity of non-current borrowings is as follows:
	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Less than one year	517	507
Between one and two years	-	-
Between two and five years	185,109	156,524
Over five years	74,582	74,524
Total	260,208	231,555

Movements in borrowings during the financial year:

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Balance at beginning of financial year	231,555	219,218
Bank finance drawn	57,945	340,412
Bank finance repaid	(29,968)	(326,372)
Interest payable1	676	(1,703)
Balance at end of financial year	260,208	231,555

1. Balance in the prior year is negative due to the capitalisation of arrangement fees on the refinancing of the RCF and the issue of private placement notes.

The Group seeks to leverage its equity capital to achieve higher returns within agreed limits. The Group has a stated policy of not incurring debt above 40% of the market value of its property assets and has a through cycle leverage target of 20-30% loan to value ('LTV'). Under the Irish REIT rules the LTV ratio must remain under 50%. The Group has no finance leases as lessee.

In December 2018 the Group refinanced its €400m secured revolving credit facility ('RCF'), which was due to expire in November 2020, with €395m of debt comprising:

· A €320m unsecured revolving credit facility expiring 19 December 2023

· €75m of unsecured US private placement notes, €37.5m dated 23 January 2026 and €37.5m 23 January 2029, with fixed rate coupons of 2.36% and 2.69%, respectively

The unsecured RCF has a five-year term and is provided by Bank of Ireland, Wells Fargo, Barclays Bank Ireland and Allied Irish Banks. This facility is denominated in euro and is subject to a margin of 2.0% over three-month EURIBOR. The Group has entered into derivative instruments so that the majority of its (€125m) EURIBOR exposure is capped at 0.75% in accordance with the Group's hedging policy (note 30.d.ii)

The private placement notes have an average maturity of 7.3 years at 31 March 2020 (31 March 2019: 8.3 years) and were placed with a single institutional investor. Coupons are fixed so long as the Group's credit rating remains at investment grade.

Where debt is drawn to finance material refurbishments and developments that take a substantial period of time to take into use, the interest cost of this debt is capitalised.

All costs related to financing arrangements are amortised using the effective interest rate. The Directors confirm that all covenants have been complied with and are kept under review. There is significant headroom on the financial covenants (note 2.e).

25.b Net debt reconciliation and LTV

Net debt and LTV are key metrics in the Group. Net debt is redemption value of borrowings as adjusted by cash available for use. LTV is the ratio of net debt to investment property value at the measurement date.

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Cash and cash equivalents	28,454	22,372
Cash reserved1	(7,457)	(5,050)
Gross debt - fixed interest rates	(75,000)	(75,000)
Gross debt - variable interest rate	(187,390)	(159,413)
Net debt at period end	(241,393)	(217,091)
Investment property at period end	1,465,183	1,395,418
Loan to value ratio	16.5%	15.6%

1. Cash is reduced by the amounts held in relation to rent deposits, sinking funds and similar arrangements as these balances are not viewed as available funds for the purposes of the above calculation.

Reconciliation of opening to closing net debt:

	Assets			Liabilities
	Cash and cash equivalents	Secured borrowings			Unsecured borrowings		Private placement notes	Total
	€'000	€'000			€'000		€'000	€'000
Net debt at as at 1 April 2018	17,691	(220,373)			-		-	(202,682)
Cash inflow	-	(31,000)			(234,413)		(75,000)	(340,413)
Cash outflow	-	251,373			75,000		-	326,373
Movement in cash and cash equivalents	(149)	-			-		-	(149)
Movement in cash reserved1	(220)	-			-		-	(220)
Net debt as at 31 March 2019	17,322				(159,413)		(75,000)	(217,091)
Cash inflow	-	-			(57,945)		-	(57,945)
Cash outflow	-	-			29,968		-	29,968
Movement in cash and cash equivalents	6,082	-			-		-	6,082
Movement in cash reserved1	(2,407)	-			-		-	(2,407)
Net debt as at 31 March 2020	20,997	-			(187,390)		(75,000)	(241,393)

1. Cash is reduced by the amounts held in relation to rent deposits, sinking funds and similar arrangements as these balances are not viewed as available funds for the purposes of the above calculation.

26. Deferred tax liabilities

The Group is not generally liable for corporate taxes as it has REIT status (see note 12). Where it is anticipated that certain assets may not qualify as assets of the property rental business (defined in legislation) or where tax may be due on assets of the property rental business, deferred tax liabilities may be recognised on unrealised gains recognised on these assets as future taxes may be payable on these gains. There were no unrecognised deferred tax assets in the period that might be available to offset against these liabilities.

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
The balance comprises temporary differences attributable to:
Unrealised gains on residual business	395	547

27 Trade and other payables

Accounting policy

Trade payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate method.

	As at 31 March 2020	As at 31 March 2019
	€'000	€'000
Current
Investment property payable	4,037	5,667
Rent prepaid	8,631	7,013
Rent deposits and other amounts due to tenants	2,543	1,222
Sinking funds	1,975	1,926
Trade and other payables	4,470	3,742
Payroll taxes payable	217	293
Balance at end of period	21,873	19,863
Of which are classified as financial instruments	2,240	3,231

Cash is held against balances due for service charges prepaid and sinking fund contributions, €3.7m (March 2019: €3.9m), and rental deposits from tenants, €2.5m (March 2019: €1.2m). Sinking funds are monies put aside from annual service charges collected from tenants as contributions towards expenditure on larger maintenance items that occur at irregular intervals in buildings managed by Hibernia. Trade and other payables are interest free and have settlement dates within one year. The Directors consider that the carrying value of the trade and other payables approximates to their fair value.

28. Contract liabilities

Accounting policy

Contract liabilities arise as a result of service charge contracts, the accounting for which is discussed in note 5.

Contract liabilities arise from service charge payables. Service charge arrangements form a single performance obligation under which the Group purchases services for multi-let buildings and recharges them to tenants. The movements for the purchase of services and income relating to these activities are presented below.

		Contract liabilities
		€'000
Contract liabilities at 1 April 2018		1,745
(Revenue)/expense recognised during the financial year		243
Amounts received from customers under contracts		6,311
Amounts paid to suppliers		(6,291)
Contract liabilities at 31 March 2019		2,008
(Revenue)/expense recognised during the financial year		(133)
Amounts received from customers under contracts		6,661
Amounts paid to suppliers		(5,359)
Contract liabilities at 31 March 2020		3,177

29. Cash flow information

29.a Non-cash movements in operating profit

		31 March 2020	31 March 2019
	Notes	€'000	€'000
Revaluation of investment property	16	(22,856)	(95,527)
Share-based payments	10	1,252	6,658
Prepaid remuneration expense		-	2,679
Net impairment losses on financial and contract assets		147	-
Depreciation	17	520	284
Other gains		(10)	(140)
Net finance expense		7,195	8,221
Tax charge		(180)	547
Non-cash movements in operating profit		(13,932)	(77,278)

29.b Cash expended on investment property

		31 March 2020	31 March 2019
	Notes	€'000	€'000
Investment property purchases	16	22,820	40,030
Development and refurbishment expenditure	16	23,636	47,221
Deposit paid on investment property	21	(145)	145
Decrease/(increase) in investment property costs payable		1,630	(549)
Cash expended on investment property		47,941	86,847

29.c Cash received from sales of investment property

		31 March 2020	31 March 2019
	Notes	€'000	€'000
Property sales	16	-	96,077
Profit on sales	7	-	2,578
Decrease/(Increase) in receivable from investment property sales	21	34,503	(34,639)
Cash received from sales of investment property		34,503	64,016

29.d Cash expended on property, plant and equipment

		31 March 2020	31 March 2019
	Notes	€'000	€'000
Additions to fixed assets	17	2,086	52
Disposal of fixed assets		(50)	-
Amounts due at financial year end		(20)	-
Cash expended on property, plant and equipment		2,016	52

30 Financial instruments and risk management

30.a Financial risk management objectives and policy

The Group takes calculated risks to realise its strategic goals and this exposes the Group to a variety of financial risks. These include, but are not limited to, market risk (including interest and price risk), liquidity risks and credit risk. These financial risks are managed in an overall risk framework by the Board, in particular by the Chief Financial Officer, and monitored and reported on by the Risk & Compliance Officer. The Group monitors market conditions with a view to minimising the volatility of the funding costs of the Group. The Group uses derivative financial instruments such as interest rate caps and swaptions to manage some of the financial risks associated with the underlying business activities of the Group.

30.b Financial assets and financial liabilities

The following table shows the Group's financial assets and liabilities and the methods used to calculate fair value.

Asset/Liability	Carrying value	Level	Fair value calculation technique	Assumptions
Trade and other receivables	Amortised cost	3	Discounted cash flow	Most trade receivables are very short-term, the majority less than one month, and therefore face value approximated fair value on a discounted basis.
Financial liabilities	Amortised cost	3	Discounted cash flow	The fair value of financial liabilities held at amortised cost have been calculated by discounting the expected cash flows at prevailing interest rates.
Derivative financial instruments	Fair value	2	Calculated fair value price	The fair value of derivative financial instruments is calculated using pricing based on observable inputs from financial markets.
Trade and other payables	Amortised cost	3	Discounted cash flow	All trade and other payables that could be classified as financial instruments are very short-term, the majority less than one month, and therefore face value approximated fair value on a discounted basis
Contract liabilities	Amortised cost	3	Discounted cash flow	All contract liabilities classified as financial instruments are very short-term, the majority less than one month, and therefore face value approximated fair value on a discounted basis

The carrying value of non-interest-bearing financial assets and financial liabilities approximates to their fair values, largely due to their short-term maturities.

30.c Fair value hierarchy

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: valuation techniques for which the lowest level of inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: valuation techniques for which the lowest level of inputs that have a significant effect on the recorded fair value are not based on observable market data.

The following tables present the classification of financial assets and liabilities within the fair value hierarchy and the changes in fair values measurements at Level 3 estimated for the purposes of making the above disclosure.

As at 31 March 2020

	Level	Total	Of which are assessed as financial instruments	Measured at fair value	Measured at amortised cost	Total financial instruments	Fair value financial instruments
		€'000	€'000	€'000	€'000	€'000	€'000
Trade and other receivables	3	13,966	1,591	-	1,591	1,591	1,591
Derivatives at fair value	2	34	34	34	-	34	34
Borrowings	3	(260,208)	(260,208)	-	(260,208)	(260,208)	(266,559)
Trade and other payables	3	(21,873)	(2,240)	-	(2,240)	(2,240)	(2,240)
Contract liabilities	3	(3,177)	(3,177)	-	(3,177)	(3,177)	(3,177)
		(271,258)	(264,000)	34	(264,034)	(264,000)	(270,351)

As at 31 March 2019

	Level	Total	Of which are assessed as financial instruments	Measured at fair value	Measured at amortised cost	Total financial instruments	Fair value financial instruments
		€'000	€'000	€'000	€'000	€'000	€'000
Trade and other receivables	3	48,092	37,630	-	37,630	37,630	37,630
Derivatives at fair value	2	194	194	194	-	194	194
Borrowings	3	(231,555)	(231,555)	-	(231,555)	(231,555)	(231,555)
Trade and other payables	3	(19,863)	(3,231)	-	(3,231)	(3,231)	(3,231)
Contract liabilities	3	(2,008)	(2,008)	-	(2,008)	(2,008)	(2,008)
		(205,140)	(198,970)	194	(199,164)	(198,970)	(198,970)

Movements of assets measured at fair value in Level 3

This reconciliation includes investment property, loans and other financial assets which are included in trade payables, trade receivables and contract liabilities and measured at fair value. Measurement of these assets is described in note 16 (Investment property) and in the table at the start of this note.

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Balance at beginning of financial year	1,395,418	1,308,869
Transfers out of level 3	-	-
Purchases, sales, issues and settlement
Purchases1	46,456	87,251
Sales	-	(96,077)
Loan redemption	-	(152)
Transfer to/from property, plant and equipment	453	-
Fair value movement	22,856	95,527
Balance at end of financial year	1,465,183	1,395,418

1. Includes development, refurbishment and remedial expenditure.

30.d Financial risk management

This note explains the Group's exposure to financial risks and how these risks could affect the Group's future financial performance.

Risk	Exposure arising from	Measurement	Management
Market risk - interest rate risk	Long-term borrowings at variable rates	Sensitivity analysis	Derivative products - cap/swaption arrangements
Credit risk	Cash and cash equivalents, trade receivables, derivative financial instruments	Ageing analysis, credit ratings where applicable	Cash investment policy with minimum ratings Diversification of deposits where merited
Liquidity risk	Borrowings and other liabilities	Cash flow forecasts are completed as part of budgeting process	Availability of borrowing facilities

The policies for managing each of these and the principal effects of these policies on the results for the financial year are summarised below:

i. Risk management framework

The Group's Board has overall responsibility for the establishment and oversight of the Group's risk management framework. The Audit Committee is responsible for developing and monitoring the Group's risk management policies. Risk management policies are established to identify and analyse the risks faced by the Group, 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 the market conditions and the Group's activities. The Audit Committee is assisted in its work by internal audit, conducted by PwC Ireland, which undertakes periodic reviews of different elements of risk management controls and procedures.

ii. Market risk

Market risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk reflects interest rate risk, currency risk and other price risks. The Group has no financial assets or liabilities denominated in foreign currencies. The Group's financial assets mainly comprise cash and cash equivalents, trade receivables. Financial liabilities comprise short-term payables, private placement notes and bank borrowings. Therefore the primary market risk is interest rate risk.

The Group has both fixed and variable rate borrowings. Variable rate borrowings consist of an unsecured revolving credit facility and the Group has partly hedged against increasing rates by entering into interest rate caps and swaptions to restrict EURIBOR costs to a maximum of 0.75%.

The following therefore illustrates the potential impact on profit and loss for the financial year of a 1% or 2% increase in EURIBOR:

As at 31 March 2020

		Impact on profit +1% EURIBOR Increase	Impact on profit +2% EURIBOR Increase
	€'000	€'000	€'000
Amount drawn	(187,390)	(1,874)	(3,748)
Hedging (caps)
€125m expires December 2021: strike 0.75%	125,000	313	1,563
Impact on profit after hedging		(1,561)	(2,185)

As at 31 March 2019

				Impact on profit +1% EURIBOR Increase		Impact on profit +2% EURIBOR Increase
	€'000			€'000		€'000
Amount drawn	(159,413)			(1,594)		(3,188)
Hedging (caps)
€100m expires November 2019: strike 1.00%1	34,413			-		344
€125m expires December 2021: strike 0.75%	125,000			313		1,563
Impact on profit after hedging					(1,281)		(1,281)

1. This calculation uses the more advantageous hedge first and therefore shows the best-case scenario.

Exposure to interest rates is limited to the exposure of the Group's earnings from borrowings. Variable rate borrowings were €187m (March 2019: €159m) and gross debt was €262m in total at the financial year end of which €75m was fixed rate private placement notes (March 2019: €234m of which €75m was fixed). The Group's drawings under its facilities were based on a EURIBOR rate of 0% throughout the financial year.

iii. Credit risk

Credit risk is the risk of loss of principal or loss of a financial reward stemming from a counterparty's failure to repay a loan or otherwise meet a contractual obligation. Credit risk is therefore, for the Group and Company, the risk that the counterparties underlying its assets default.

The Group has the following types of financial assets and cash that are subject to credit risk:

Cash and cash equivalents:These are held with major Irish and European institutions. The Board has established a cash management policy for these funds which it monitors regularly. This policy includes ratings restrictions, BB or better, and related investment thresholds, maximum balances of €25-50m with individual institutions dependent on rating, to avoid concentration risks with any one counterparty. The Group has also engaged the services of a Depository to ensure the security of the cash assets.

Trade and other receivables:Rents are generally received in advance from tenants and therefore there tends to be a low level of credit risk associated with this asset class. As part of the Group's response to the COVID-19 pandemic, a credit rating system was introduced for tenants. This is used, together with an analysis of past loss patterns and future expectations of economic impacts, to create a matrix for the calculation and provision of expected credit losses (note 21). Included in non-current trade receivables is a net amount of €1.0m relating to expenditure on fit-outs that is recoverable from tenants over the duration of the lease (31 March 2019: €0.7m). This amount is monitored closely in the current economic environment due to its long-term nature. An amount of €0.1m was due in relation to the sale of an investment property at 31 March 2020 (March 2019: €34.6m). Otherwise, the Group has small balances in trade receivables which are immaterial in the context of credit risk.

Trade receivables are managed under a 'held to collect' business model as described in note 21. ECL on financial and contract assets recognised during the financial year were €147k (31 March 2019: €nil). Details on the Group's policy on providing ECL can be found in the introduction to Section IV. The Group has a diverse range of tenants, many of which are large multinational companies (56% of its contracted rent is from the TMT sector and Government/state entities), and to date our rent collection statistics have remained strong (note 2.e).

The maximum amount of credit exposure is therefore:

	As at 31 March 2020	As at 31 March 2019
	€'000	€'000
Other financial assets	34	194
Trade and other receivables	13,966	37,630
Cash and cash equivalents	28,454	22,372
Balance at end of financial year	42,454	60,196

iv. Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group ensures that it has sufficient available funds to meet obligations as they fall due. Net current assets, a measure of the Group's ability to meet its current liabilities, at the financial year end were:

						As at 31 March 2020 €'000	As at 31 March 2019 €'000
Net current assets at the financial year end						6,638	40,692

The nature of the Group's activities means that the management of cash is particularly important and is managed over a four-year period. The budget and forecasting process includes cash forecasting, capital and operational expenditure projections, cash inflows and dividend payments on a quarterly basis over the four-year horizon. This allows the Group to monitor the adequacy of its financial arrangements.

The Group had access at 31 March 2020 to €133m (March 2019: €161m) in undrawn amounts under its revolving credit facility (note 25.a), which matures in December 2023. As a precaution given the uncertainty caused by COVID-19, the Group has implemented a policy of maintaining a minimum cash balance of €20m at all times for liquidity purposes.

Exposure to liquidity risk

Listed below are the contractual cash flows of the Group's financial liabilities. This includes contractual maturity in relation to borrowings which is also the earliest maturity of the facilities assuming that covenants are not breached. Covenants are reviewed quarterly and scenario analyses performed as to the circumstances under which these covenants could be breached in order to monitor going concern and viability (see also note 2.e). Only trade and other payables relating to cash expenditure are included; the balance relates either to non-cash items or deferred income. These include interest margins payable and contracted repayments. EURIBOR is assumed at 0% throughout the period.

At 31 March 2020

	Carrying amount	Contractual cash flows	6 months or less	6-12 months	1-2 years	2-5 years	>5 years
Non-derivatives
Borrowings	260,208	285,516	2,821	2,821	5,642	194,629	79,604
Trade payables	2,240	2,240	2,240	-	-	-	-
Contract liabilities	3,177	3,177	3,177	-	-	-	-
Total	265,625	290,933	8,238	2,821	5,642	194,629	79,604

At 31 March 2019

	Carrying amount	Contractual cash flows	6 months or less	6-12 months	1-2 years	2-5 years	>5 years
Non-derivatives
Borrowings	234,413	265,390	2,541	2,541	5,082	173,765	81,461
Trade payables	3,231	3,231	3,231	-	-	-	-
Contract liabilities	2,008	2,008	2,008	-	-	-	-
Total	239,652	270,629	7,780	2,541	5,082	173,765	81,461

v. Capital management

The Group's objectives when managing capital are to:

· Safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders

· Maintain an optimal capital structure to minimise the cost of capital

In order to maintain or adjust capital, the Group may adjust the amount of dividends paid to shareholders (whilst ensuring it maintains compliance with the dividend distribution requirements of the Irish REIT regime) return capital to shareholders, issue new shares or sell assets to reduce debt. In November 2019, the Company completed a share buyback programme to return €25m, the majority of the net sales proceeds (€35m) from the sale of an investment property, to shareholders (note 22). The Group is also obliged to distribute at least 85% of its property rental income annually under the REIT regime regulations.

Capital comprises share capital, retained earnings and other reserves as disclosed in the consolidated statement of changes in equity. At 31 March 2020 the total capital of the Group was €1,231m (March 2019: €1,219m).

The key performance indicators used in evaluating the achievement of strategic objectives, and as performance measurements for remuneration, are as follows:

· Total property return ('TPR') %:Measures the relative performance of the Company's investment property portfolio versus the Irish property market, as calculated by the MSCI

· Total accounting return ('TAR') %:Measures the absolute growth in the Group's EPRA NAV per share plus any ordinary dividends paid during the financial year.

· EPRA earnings per share (cent):Measures the profit after tax excluding revaluations and gains and losses on disposals and associated taxation (if any). For property companies it is a key measure of a company's operational performance and capacity to pay dividends.

· Total shareholder return ('TSR') %:Measures growth in share value over a period assuming dividends are re-invested in the purchase of shares. Allows comparison of performance against other companies in the Group's listed peer group.

The Group seeks to leverage its equity capital in order to enhance returns (note 25.a). The loan to value ratio ('LTV') is expressed as net debt (note 25.b) divided by total investment property value (as shown in the balance sheet). The Group's policy is to maintain an LTV ratio of 20-30% on a through cycle basis and not to incur debt above an LTV ratio of 40% (see note 25.b).

Loan covenants

Under the terms of the major borrowing facilities, the Group is required to comply with the following key financial covenants:

· The LTV ratio must not exceed 50%

· Interest cover must be greater than 1.5 times on both a 12-month historical and forward basis

· The net worth (Net Asset Value) of the Group must exceed €400m at all times

The Group has complied with these key covenants throughout the reporting period.

Other

In addition, the LTV ratio must remain under 50% under the rules of the Irish REIT regime.

The Company's share capital is publicly traded on Euronext Dublin and the London Stock Exchange.

As the Company is authorised under the Alternative Investment Fund regulations it is required to maintain a minimum of 25% of its annual fixed overheads as capital. This is managed through the Company's risk management process. The limit was monitored throughout the financial year and no breaches occurred.

Section V-Other

This section contains notes that do not belong in any of the previous categories.

31. Operating lease receivables

Future aggregate minimum rentals receivable (to the next break date) under non-cancellable operating leases are:

	As at 31 March 2020 €'000	As at 31 March 2019 €'000
Operating lease receivables due in:
Less than one year	64,206	55,395
Between two and five years	178,678	162,407
Greater than five years	142,282	195,291
Total	385,166	413,093

The Group leases its investment properties under operating leases. The weighted average unexpired lease term ('WAULT') at 31 March 2020, excluding residential properties and weighted on contracted rents, based on the earlier of lease break or expiry date was 6.4 years (March 2019: 7.5 years).

These calculations are based on all leases in place at 31 March 2020, i.e. including leases that are in place but have not yet commenced.

32. Capital commitments

The Group has entered into a number of development contracts to develop buildings in its portfolio. The total capital expenditure commitment in relation to these over the next one to two years is approximately €18m (March 2019: €35m).

33. Contingent liabilities

Accounting policy

Contingent liabilities are possible obligations depending on whether some uncertain future event occurs, or present obligations where payment is not probable, or the amount cannot be measured reliably. Contingent liabilities are not recognised but are disclosed unless the possibility of an outflow of economic resources is remote.

The Group has not identified any contingent liabilities which are required to be disclosed in the financial statements.

34. Related parties

34.a Subsidiaries

All transactions between the Company and its subsidiaries are eliminated on consolidation.

The following are the major subsidiaries of the Group:

Name	Registered address/ Country of incorporation	Shareholding/ Number of shares held	Directors	Company Secretary	Nature of business
Hibernia REIT Holding Company Limited	1WML Windmill Lane Dublin D02 F206 Ireland	100%/1	Justin Dowling Thomas Edwards-Moss Kevin Nowlan Frank O'Neill	Sean O'Dwyer	Holding property interests
Hibernia REIT Holdco One Limited	1WML Windmill Lane Dublin D02 F206 Ireland	100%/1	Justin Dowling Thomas Edwards-Moss Kevin Nowlan Frank O'Neill	Sean O'Dwyer	Holding property interests
Hibernia REIT Holdco Two Limited	1WML Windmill Lane Dublin D02 F206 Ireland	100%/1	Edwina Governey Kevin Nowlan Mark Pollard	Sean O'Dwyer	General partner
Hibernia REIT Holdco Three Limited	1WML Windmill Lane Dublin D02 F206 Ireland	100%/1	Justin Dowling Thomas Edwards-Moss Frank O'Neill	Sean O'Dwyer	Property development
Hibernia REIT Holdco Four Limited	1WML Windmill Lane Dublin D02 F206 Ireland	100%/1	Justin Dowling Thomas Edwards-Moss Frank O'Neill	Sean O'Dwyer	Holding property interests
Hibernia REIT Building Management Services Limited	1WML Windmill Lane Dublin D02 F206 Ireland	100%/1	Justin Dowling Thomas Edwards-Moss Kevin Nowlan Frank O'Neill	Sean O'Dwyer	Property management
NL7 Limited Partnership	1WML Windmill Lane Dublin D02 F206 Ireland	n/a	Hibernia REIT Holdco Two Limited (General Partner)	Sean O'Dwyer	Holding property interests
Hibernia REIT Finance Limited	1WML Windmill Lane Dublin D02 F206 Ireland	100%/10	Justin Dowling Thomas Edwards-Moss Kevin Nowlan Frank O'Neill	Sean O'Dwyer	Financing activities
WK Nowlan REIT Management Limited	1WML Windmill Lane Dublin D02 F206 Ireland	100%/300,000	Thomas Edwards-Moss Kevin Nowlan Frank O'Neill	Sean O'Dwyer	Investment holding company

34.b Other related party transactions

Both Kevin Nowlan and Frank O'Neill were shareholders in WK Nowlan Real Estate Advisors up until July 2019 when these shareholdings were disposed of in full.

The rent review with WK Nowlan Real Estate Advisors, which was live during the financial year ended 31 March 2019, was settled during this financial year. The Group earned rent of €115k (inclusive of backdated amounts) from WK Nowlan Real Estate Advisors in Marine House during the financial year (March 2019: €115k). The Group was not owed any rent at end of the financial year (March 2019: €73k).

As his consultancy agreement with the Company has ceased prior to the commencement of this financial year, Frank Kenny (Non-Executive Director) earned no consultancy fees (March 2019: €140k). No amounts were owed to him in respect of consultancy fees at the financial year-end (March 2019: €35k).

Amounts due in relation to the final tranche of the IMA performance-related payments which expired on 26 November 2018 were settled by the issuance of shares in the financial year as follows: Kevin Nowlan: €2.3m, Frank Kenny: €1.5m, William Nowlan: €1.1m and Frank O'Neill: €0.5m. (March 2019: Kevin Nowlan: €2.8m, Frank Kenny: €1.8m, William Nowlan: €1.4m and Frank O'Neill: €0.6m).

Thomas Edwards-Moss (CFO) rented an apartment from the Group at market rent and paid €14k in rent during the financial year (March 2019: €12k).

Stewart Harrington (Non-Executive Director) rented an apartment from the Group for part of the financial year at market rent and paid €9k in rent during the financial year (March 2019: €0k).

34.c Key management personnel

In addition to the Executive and Non-Executive Directors, the following are the key management personnel of the Group:

Justin Dowling Director of Property

Edwina Governey Chief Investment Officer

Sean O'Dwyer Company Secretary and Risk & Compliance Officer

Frank O'Neill Director of Operations

Mark Pollard Director of Development

The remuneration of the above key management personnel paid during the financial year was as follows:

	Financial year ended 31 March 2020 €'000	Financial year ended 31 March 2019 €'000
Short-term benefits	3,385	3,035
Post-employment benefits	262	226
Other long-term benefits	-	-
Share-based payments	364	353
Total for the financial year	4,014	3,614

The remuneration of Executive Directors and key management is determined by the Remuneration Committee, having regard to the performance of individuals, of the Group and market trends.

35. Events after the reporting period

1. The Directors have proposed a final dividend of 3.0 cent per share that is subject to approval at the AGM to be held on 29 July 2020.

2. On 23 May 2019 the Group announced its intention to undertake a share capital reorganisation to convert part of its share premium into distributable reserves. A resolution was passed at the Group's AGM on 31 July 2019 approving this reorganisation. The reorganisation and conversion of €50m of share premium into distributable reserves was approved by the Court in March 2020 and legally registered in April 2020.

Supplementary information

i. Five-year record

Based on the Group's consolidated financial statements for the year ended 31 March:

Consolidated statement of financial position	2020	2019	2018	2017	2016
	€'m	€'m	€'m	€'m	€'m
Investment property	1,465	1,395	1,309	1,167	928
Other assets	52	77	44	43	61
Financial liabilities	(260)	(231)	(219)	(171)	(73)
Other liabilities	(26)	(23)	(22)	(25)	(19)
Net assets	1,231	1,218	1,112	1,014	897
Financed by:
Share capital	700	694	687	678	673
Reserves	531	524	425	336	224
Total equity	1,231	1,218	1,112	1,014	897
IFRS NAV per share (cent)	179.8	174.7	160.6	147.9	131.6
EPRA NAV per share (cent)	179.3	173.3	159.1	146.3	130.8
Consolidated income statement	2020	2019	2018	2017	2016
	€'m	€'m	€'m	€'m	€'m
Net rental income	59	53	46	40	30
Gains and losses on investment property	23	98	88	104	125
Other gains and losses	-	-	-	2	-
Total operating expenses	(14)	(19)	(21)	(21)	(15)
Operating profit	68	132	113	125	140
Net finance expense	(7)	(8)	(6)	(6)	(4)
Profit for the financial year	61	124	107	119	136
Basic earnings per share (cent)	8.9	17.8	15.5	17.3	20.2
Diluted earnings per share (cent)	8.8	17.6	15.4	17.2	20.1
EPRA earnings per share (cent)	5.5	4.0	2.8	2.2	1.5
Diluted EPRA earnings per share (cent)	5.5	3.9	2.8	2.2	1.5
Dividend per share (cent)	4.8	3.5	3.0	2.2	1.5

ii. Alternative performance measures

The Group has applied the European Securities and Markets Authority ('ESMA') 'Guidelines on Alternative Performance Measures' in this document. An alternative performance measure ('APM') is a measure of financial or future performance, position or cash flows of the Group which is not a measure defined by International Financial Reporting Standards ('IFRS'). The main APMs presented are European Public Real Estate Association ('EPRA') Performance Measures as set out in EPRA's Best Practice Recommendations ('BPR'). These measures are defined by EPRA in order to encourage comparability with the real estate sector in Europe (see Section iii).

The following are the APMs used in this report together with information on their calculation and relevance.

APM	Reconciled to IFRS measure:	Reference	Definition
Contracted rent roll	n/a	n/a	Contracted rent under the lease agreements, and excluding all incentives or rent abatements, for the portfolio as at the reporting date.
EPRA cost ratios	IFRS operating expenses	iii.c	Calculated using all administrative and operating expenses under IFRS net of service fees. It is calculated including and excluding vacancy costs.
EPRA earnings	IFRS profit after tax	iii.a	As EPRA earnings is used to measure the operational performance of the Group, it excludes all components not relevant 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 per share ('EPRA EPS')	IFRS earnings per share	Note 14 iii.a	EPRA earnings on a per share basis.
EPRA like-for-like rental growth reporting	n/a	iii.b	Like-for-like rental growth compares the growth of the net rental income of the portfolio that has been consistently in operation, and not under development, during the two full preceding periods that are described.
EPRA NAV	IFRS NAV	Note 15 iii.f	The objective of the EPRA NAV measure is to highlight the fair value of net assets on an ongoing, long-term basis. Assets and liabilities that are not expected to crystallise in normal circumstances such as the fair value of financial derivatives and deferred taxes on property valuation surpluses are therefore excluded.
EPRA NAV per share	IFRS NAV per share	Note 15 iii.f	EPRA NAV calculated on a diluted basis taking into account the impact of any options, convertibles, etc. that are 'dilutive'.
EPRA NNNAV	IFRS NAV via EPRA NAV	iii.f	Reports EPRA NAV including fair value adjustments for any material balance sheet items which are not included in EPRA NAV at fair value.
EPRA NNNAV per share	IFRS NAV per share via EPRA NAV	iii.f	Reports EPRA NAV including fair value adjustments for any material balance sheet items which are not included in EPRA NAV at fair value and calculated on a dilutive basis.
EPRA Net Reinstatement Value ('NRV')	IFRS NAV	iii.f	This assumes that entities never sell assets and aims to represent the value required to rebuild the entity.
EPRA Net Reinstatement Value ('NRV') per share	IFRS NAV	iii.f	EPRA NRV calculated on a diluted basis taking into account the impact of any options, convertibles, etc. that are 'dilutive'.
EPRA Net Tangible Assets ('NTA')	IFRS NAV	iii.f	Assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax.
EPRA Net Tangible Assets ('NTA') per share	IFRS NAV	iii.f	EPRA NTA calculated on a diluted basis.
EPRA Net Disposal Value ('NDV')	IFRS NAV via EPRA NAV	iii.f	Represents the shareholders' value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax.
EPRA Net Disposal Value ('NDV') per share	IFRS NAV via EPRA NAV	iii.f	EPRA NDV calculated on a diluted basis'
EPRA Net Initial Yield ('EPRA NIY')	n/a	iii.e	Inherent yield of the completed portfolio using passing rent at the reporting date.
EPRA 'topped-up' Net Initial Yield ('EPRA 'topped-up' NIY')	n/a	iii.e	Inherent yield of the completed portfolio using contracted rent at the reporting date.
EPRA vacancy rate	n/a	iii.d	ERV of the vacant space over the total ERV of the completed portfolio.
Loan to value ('LTV')	n/a	Note 25.b	Net debt as a proportion of the value of investment properties
Final and interim dividend per share	Dividend per share	Note 13	Number of cent to be distributed to shareholders in dividends.
Net debt	Financial liabilities	Note 25.b	Financial liabilities net of cash balances (as reduced by the amounts collected from tenants for deposits, sinking funds and similar) available.
Passing rent	n/a	n/a	Annualised gross property rent receivable on a cash basis as at the reporting date.
Property-related capital expenditure		Note 16	Property-related capital expenditure analysed so as to illustrate the element of such expenditure that is 'maintenance' rather than investment.
Reversionary potential	n/a	iii.g.iii	Potential rent uplift available from leases with break dates, expiring or review events in future periods.
Total accounting return ('TAR')	Indirectly through EPRA NAV per share	Note 15	Measures the absolute growth in the Group's EPRA NAV per share plus any ordinary dividends paid in the accounting period.
Total property return ('TPR')	n/a	n/a	TPR is the return for the period of the property portfolio (capital and income) as calculated by MSCI, the producers of the MSCI Ireland Property Index.

iii. European Public Real Estate Association ('EPRA') Performance Measures

EPRA performance measures presented here and summarised on page 20 of this statement are calculated according to the EPRA Best Practices Recommendations November 2016, although some measures from the October 2019 updated BPR (valid for the financial year ended 31 March 2021 onwards) are also presented. 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 for variable remuneration. All measures are presented on a consolidated basis only and, where relevant, are reconciled to IFRS figures as presented in the consolidated financial statements.

iii.a EPRA earnings

EPRA earnings, earnings from operational activities, are presented as they are a key measure of the Group's underlying operating result and an indication of the extent to which current dividend payments are supported by earnings. Unrealised changes in valuation, gains or losses on disposals of properties and certain other items are excluded as they are not considered to be part of the core activity of an investment property company.

		Financial year ended 31 March 2020	Financial year ended 31 March 2019
EPRA earnings	Note	€'000	€'000
Profit for the financial year attributable to owners of the parent		61,043	123,459
Adjusted for:
Gains and losses on investment property	16	(22,856)	(98,105)
Profit or loss on disposals of other assets		-	(140)
Deferred tax in respect of EPRA adjustments	26	(152)	547
Changes in fair value of financial instruments and associated close-out costs		58	1,711
EPRA earnings		38,093	27,472
EPRA earnings per share and diluted EPRA earnings per share		'000	'000
Weighted average number of ordinary shares (basic)		688,759	694,968
Weighted average number of ordinary shares (diluted) (note 14)		691,134	700,996
EPRA earnings per share (cent)		5.5	4.0
Diluted EPRA earnings per share (cent)		5.5	3.9

iii.b EPRA like-for-like ('L-f-L') rental growth

L-f-L net rental growth compares the growth of the net rental income of the portfolio that has been consistently in operation, and not under development, during the two full preceding periods that are described. Information on the growth in rental income, other than from acquisitions and disposals, allows stakeholders to arrive at an estimate of organic growth. This can be used to measure whether the reversions feed through as anticipated, and whether the vacancy rates are changing. This is presented on a segmented basis by portfolio type. All properties are in Dublin therefore a geographic spread is not included.

Financial year ended 31 March 2020

Whole portfolio			Like-for-like portfolio
Segment	Value - all assets	Net rental income	VALUE L-f-L assets		Net rental income L-f-L assets current year	Net rental income L-f-L assets prior year	Growth in net rental income
	€'m	€'m	€'m		€'m	€'m	€'m	%
Office assets	1,196.9	51.5	963.2		45.7	44.1	1.6	3.7
Residential assets	159.5	5.9	147.7		5.9	5.6	0.3	6.0
Industrial/land assets	60.8	1.2	13.0		0.7	0.7	0.0	(0.9)
Total 'in-place' portfolio	1,417.2	58.6	1,123.9		52.3	50.4	2.0	3.9
Development assets	48.0	-
Assets sold	-	-
Total portfolio	1,465.2	58.6

Buildings excluded from L-f-L as at 31 March 2020

Developments/refurbishments concluded in prior year: 1SJRQ, 2WML, Cannon Place (residential)

Developments in progress/sites: 2 Cumberland Place, Newlands

Properties acquired: 2020: Docklands office asset, all units in Dublin Road Industrial Estate, Industrial unit Malahide Road; 2019: 50 City Quay, 129 Slaney Road Industrial Park, Clanwilliam Apartments

Properties sold: 2020: None; 2019: New Century House, 77 Sir John Rogerson's Quay

Financial year ended 31 March 2020

Whole portfolio			Like-for-like portfolio
Segment	Value - all assets	Net rental income	VALUE L-f-L assets	Net rental income L-f-L assets current year	Net rental income L-f-L assets prior year	Growth in net rental income
	€'m	€'m	€'m	€'m	€'m	€'m	%
Office assets	1,173.1	43.9	725.8	35.3	32.5	2.8	8.5
Residential assets	153.1	5.5	134.1	5.2	5.1	0.1	2.1
Industrial/land assets	53.0	1.0	12.8	0.7	0.7	0.0	5.8
Total 'in-place' portfolio	1,379.2	50.4	872.7	41.2	38.3	2.9	7.6
Development assets	16.2	-
Assets sold	-	2.9
Total portfolio	1,395.4	53.3

Buildings excluded from L-f-L as at 31 March 2019

Developments/refurbishments concluded: 1WML, 1SJRQ, 2WML, Two Dockland Central, Hanover Mills (residential), Cannon Place (residential)

Developments in progress/sites: 2 Cumberland Place, Newlands

Properties acquired: 50 City Quay, 129 Slaney Road Industrial Park, Clanwilliam Apartments; 2018: 77 Sir John Rogerson's Quay acquired in year end March 2018)

Properties sold: 2019: New Century House, 77 SJRQ; 2018: The Chancery, Hanover Street East and Lime Street

iii.c EPRA cost ratios

A key measure to enable meaningful measurement and comparison of the changes in a company's operating costs.

	Financial year ended 31 March 2020 €'000	Financial year ended 31 March 2019 €'000
Total operating expenses under IFRS	13,393	19,291
Property expenses1	3,051	2,596
Net service charge costs/fees	65	122
EPRA costs including direct vacancy costs	16,509	22,009
Direct vacancy costs	(964)	(545)
EPRA costs excluding direct vacancy costs	15,545	21,464
Gross rental income1	61,701	56,027
EPRA cost ratio including direct vacancy costs	26.8%	39.3%
EPRA cost ratio excluding direct vacancy costs	25.2%	38.3%

1. Adjusted for costs recovered through rents and, under IFRS, accounted for on a gross basis.

The Group has not capitalised any overheads in the current or the prior financial year. Property expenses are reduced by the costs which are reimbursed through rental receipts.

iii.d EPRA vacancy rate

This provides comparable and consistent vacancy data for investors based on the Valuer's assessment of gross ERV. The EPRA vacancy rate measures the ERV of vacant space expressed as a percentage of the total ERV.

	Financial year ended 31 March 2020 €'000	Financial year ended 31 March 2019 €'000
Annualised ERV vacant units1	5,208	7,265
Annualised ERV completed portfolio	75,173	67,760
EPRA vacancy rate	6.9%	10.7%

1. The ERV from vacant units includes the vacant units within the Group's residential assets at the financial year end

iii.e EPRA Net Initial Yield ('EPRA NIY') and EPRA 'topped-up' Net Initial Yield

This measures the inherent yield of the portfolio according to set guidelines to allow investors to compare real estate investment companies across Europe on a consistent basis, using current cash passing rent. EPRA 'topped-up' NIY: this measures the yield based on rents adjusted for the expiration of lease incentives, i.e. on a contracted rent basis.

At 31 March 2020

	Office €'m	Residential €'m	Industrial/land €'m	Total €'m	Development €'m	Total €'m
Investment property at fair value	1,197	159	61	1,417	48	1,465
Less: Development/refurbishment	-	-	(33)1	(33)	(48)	(81)
Completed property portfolio	1,197	159	28	1,384	-	1,384
Allowance for purchasers' costs2	119	7	3	129
Gross up completed property portfolio (A)	1,316	166	31	1,513
Annualised cash passing rental income3	55	7	2	64
Property outgoings	(1)	(1)	-	(2)
Annualised net rents (B)	54	6	2	62
Expiry of lease incentives and fixed uplifts4	4	-	-	4
'Topped-up' annualised net rent (C)	58	6	2	66
EPRA NIY (B/A)	4.2%	3.7%	5.2%	4.1%
EPRA 'Topped-up' NIY (C/A)	4.4%	3.7%	6.1%	4.4%

1. Lands at Newlands are excluded as held for future development and were undeveloped at the 31 March 2020

2. Purchasers' costs are 9.96% (up from 8.46% from October 2019) for commercial property and 4.46% for residential

3. Cash passing rent includes residential rents gross as property outgoings are included separately and rents from the Iconic arrangement in Clanwilliam

4. Expiry of lease incentives and fixed uplifts are mainly within one year

At 31 March 2019

	Office	Residential	Industrial/land	Total	Development	Total
	€'m	€'m	€'m	€'m	€'m	€'m
Investment property at fair value	1,173	153	53	1,379	16	1,395
Less: Development/refurbishment	-	-	(36)1	(36)	(16)	(52)
Completed property portfolio	1,173	153	17	1,343	-	1,343
Allowance for purchasers' costs2	100	7	1	108
Gross up completed property portfolio (A)	1,273	160	18	1,451
Annualised cash passing rental income3	47	7	1	55
Property outgoings	(1)	(1)	-	(2)
Annualised net rents (B)	46	6	1	53
Expiry of lease incentives and fixed uplifts4	7	-	-	7
'Topped-up' annualised net rent (C)	52	6	1	60
EPRA NIY (B/A)	3.6%	3.7%	5.8%	3.6%
EPRA 'Topped-up' NIY (C/A)	4.1%	3.7%	6.5%	4.1%

1. Lands at Newlands are excluded as held for future development and were undeveloped at the 31 March 2020

2. Purchasers' costs are 8.46% for commercial property and 4.46% for residential

3. Cash passing rent includes residential rents gross as property outgoings are included separately and rents from the Iconic arrangement in Clanwilliam

4. Expiry of lease incentives and fixed uplifts are mainly within one year

iii.f EPRA NAV measures

Net Asset Value ('NAV') is a key performance measure for real estate companies. EPRA has introduced a number of measures to enhance investors' understanding. EPRA has defined two measures in the 2016 Guidelines as below.

EPRA NAV and EPRA NNNAV: The objective of EPRA NAV is to highlight the fair value of net assets on an ongoing, long-term basis. Therefore assets which are not expected to crystallise in normal circumstances are excluded while trading properties are adjusted to their fair value. The Group presents its investment properties in its financial statements at fair value as allowed under IAS 40 and has no items not expected to crystallise in a long-term investment property business model. The fair value of derivative instruments is excluded from EPRA NAV on the basis that these are hedging instruments and intended to be held to maturity. EPRA NNNAV reports represents the shareholders' value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax.

	Financial year ended 31 March 2020		Financial year ended 31 March 2019
	€'000	Cent per share	€'000	Cent per share
IFRS NAV	1,231,149		1,218,539
Deferred tax	395		547
Fair value of financial instruments	234		288
EPRA NAV	1,231,778	179.3	1,219,374	173.3
Deferred tax	(395)		(547)
Fair value of financial instruments	(6,585)		(288)
EPRA NNNAV	1,224,798	178.3	1,218,539	173.2
Diluted ordinary shares issued (note 15)	687,032		703,617

Calculation of EPRA NRV, EPRA NTA and EPRA NDV (new measures introduced in EPRA BPR October 2019)

These measures replace EPRA NAV and EPRA NNNAV for future financial years.

EPRA Net Reinstatement Value ('NRV') highlights the value of net assets on a long-term basis. This assumes that entities never sell assets and aims to represent the value required to rebuild the entity.

EPRA Net Tangible Assets ('NTA') assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax.

EPRA Net Disposal Value ('NDV') represents the shareholders' value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax.

	Financial year ended 31 March 2020
	EPRA NRV	EPRA NTA1	EPRA NDV2,5
	€'000	€'000	€'000
IFRS NAV	1,231,149	1,231,149	1,231,149
Include:
Revaluation of other non-current investments	-	-	-
Diluted NAV at fair value3	1,231,149	1,231,149	1,231,149
Exclude:
Deferred tax in relation to unrealised gains on investment property	395	-	-
Fair value of financial instruments	234	234	-
Include:
Fair value of fixed interest rate debt	-	-	(6,380)
Real estate transfer tax4	138,545	-	-
NAV performance measure	1,370,323	1,231,383	1,224,769
Diluted number of shares at financial year end	687,032	687,032	687,032
NAV per share at financial year end	199.5c	179.2c	178.3c

1. Following changes to the Irish REIT legislation introduced in October 2019, if a REIT disposes of an asset of its property rental business and does not (i) distribute the gross disposal proceeds to shareholders by way of dividend; (ii) reinvest them into other assets of its property rental business (whether by acquisition or capital expenditure) within a three-year window (being one year before the sale and two years after it); or (iii) use them to repay debt specifically used to acquire, enhance or develop the property sold, then the REIT will be liable to tax at a rate of 25% on 85% of the gross disposal proceeds, subject to having sufficient distributable reserves. For the purposes of EPRA NTA we have assumed any such sales proceeds are reinvested within the required three year window.

2. Deferred tax is assumed as per the IFRS balance sheet. To the extent that an orderly sale of the Group's assets was undertaken over a period of several years, during which time (i) the Group remained a REIT; (ii) no new assets were acquired or sales proceeds reinvested; (iii) any developments completed were held for three years from completion; and (iv) those assets sold were sold at Mar-19 valuations, the sales proceeds would need to be distributed to shareholders by way of dividend within the required timeframe or else a tax liability amounting to up to 25% of distributable reserves plus current unrealised revaluation gains could arise for the Group.

3. The Group uses the fair value option under IAS 40 and has no hybrid instruments or tenant leases held as finance leases.

4. The Group has no goodwill or intangibles. This is the purchasers' costs amount as provided in the valuation certificate. Purchasers' costs consist of items such as stamp duty on legal transfer and other purchase fees that may be incurred, and which are deducted from the gross value in arriving at the fair value of investment and owner occupied property for IFRS purposes. Purchasers' costs are in general estimated at 9.96% (up from 8.46% from October 2019) for commercial and 4.46% for residential.

5. Following changes to the Irish REIT legislation introduced in October 2019, if the Group ceases to be a REIT, as defined under Irish legislation, within 15 years of it originally becoming a REIT then a potential tax liability could arise for the Group.

	Financial year ended 31 March 2019
	EPRA NRV	EPRA NTA	EPRA NDV
	€'000	€'000	€'000
IFRS NAV	1,218,539	1,218,539	1,218,539
Include:
Revaluation of other non-current investments	-	-	-
Diluted NAV at fair value1	1,218,539	1,218,539	1,218,539
Exclude:
Deferred tax in relation to unrealised gains on investment property	547	-	-
Fair value of financial instruments	288	288	-
Include:
Fair value of fixed interest rate debt	-	-	-
Real estate transfer tax2	112,972	-	-
NAV performance measure	1,332,346	1,218,827	1,218,539
Diluted number of shares at financial year end	703,617	703,617	703,617
NAV per share at financial year end	189.4c	173.2c	173.2c

1. The Group uses the fair value option under IAS 40 and has no hybrid instruments or tenant leases held as finance leases.

2. 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 property and owner occupied property for IFRS purposes. Purchasers' costs are in general estimated at 8.46% for commercial property and 4.46% for residential.

iii.g Portfolio information

Portfolio information can be generally found in the business review section of this report. Below is further information based on the guidelines issued by EPRA.

i. Additional analysis of rental income

All rents are denominated in Euro.

	Financial year ended 31 March 2020	Financial year ended 31 March 2019
	€'m	€'m
Properties owned throughout last two last years	54.8	43.4
Acquisitions	0.8	0.3
Disposals	-	3.0
Developed/refurbished property1	6.2	9.3
Gross rental income	61.8	56.0
Less: property operating expenses	(3.2)	(2.7)
Net rental income	58.6	53.3

1. 2020: 1SJRQ and 2WML; 2019: 1WML, Hanover Mills, Two Dockland Central and Cannon Place apartments

ii. Portfolio statistics - valuation

	Financial year ended 31 March 2020
	Market value €'m	Valuation movement €'m	EPRA NIY %	EPRA 'topped-up' NIY %	Reversionary yield %
Office	1,197	5	4.2	4.4	4.8
Development	48	18	n/a	n/a	n/a
Residential	159	5	3.7	3.7	4.5
Industrial/land	61	(6)	5.21	6.11	5.51
Total	1,465	22	4.1	4.4	4.7

1. These yields exclude the value of the lands at Newlands in accordance with EPRA guidance.

	Financial year ended 31 March 2019
	Market value €'m	Valuation movement €'m	EPRA NIY %	EPRA 'topped-up' NIY %	Reversionary yield %
Office	1,173	35	3.6	4.1	4.8
Development	16	48	n/a	n/a	n/a
Residential	153	13	3.7	3.7	4.3
Industrial/land	53	(1)	5.81	6.51	6.51
Total	1,395	96	3.6	4.1	4.7

1. These yields exclude the value of the lands at Newlands in accordance with EPRA guidance.

iii. Reversionary potential

The following data is calculated for the 'in-place' office and industrial portfolio (inclusive of the Iconic arrangement) and based on the earliest of review, break or expiry dates. Residential data is excluded as reversion to ERV is limited to 4% in rent-controlled areas where all the residential assets are based, and all leases roll on average annually. Contracted rent is used to avoid overstating uplifts to ERV as fixed uplifts are generally in the first year of lease and are accounted for on a smoothed period over the lease term in the financial data. Further details on portfolio rent statistics can be found in the business review.

As at 31 March 2020

Rent subject to rent reviews
Financial year ended 31 March	2021	2022	2023-24	>2024	Total
	€'m	€'m	€'m	€'m	€'m
Contracted rent	5.3	9.8	11.0	12.2	38.3
Uplift to ERV1	1.1	0.5	0.1	(0.1)	1.6
Total	6.4	10.3	11.1	12.1	39.9
% increase/(decrease) possible	21%	5%	1%	-	4%
From vacant space	4.7	-	-	-	4.7
Total	11.1	10.3	11.1	12.1	44.6
Rent subject to break or expiry
Financial year ended 31 March	2021	2022	2023-24	>2024	Total
	€'m	€'m	€'m	€'m	€'m
Contracted rent	3.8	3.5	12.1	2.7	22.1
Uplift to ERV	(0.3)	(0.1)	(0.6)	(0.1)	(1.1)
Total	3.5	3.4	11.5	2.6	21.0
% increase/(decrease) possible	(9)%	(1)%	(5)%	(1)%	(5)%
Total reversion from review and break/expiry (excluding vacancy)
Total contracted rent	9.1	13.3	23.1	14.9	60.4
Total uplift to ERV	0.8	0.4	(0.5)	-	0.7
% increase/(decrease) possible	9%	4%	(2)%	-	1%
% increase possible including vacancy					9%

1. ERV uplift includes all 'in-place' office and industrial potential uplifts and excludes the Group's residential units. The Group may develop some of these properties in the longer term and therefore these reversions may not be obtained.

As at 31 March 2019

Rent subject to rent reviews
Financial year ended 31 March	2020	2021	2022-24	>2024	Total
	€'m	€'m	€'m	€'m	€'m
Contracted rent	3.9	1.6	19.9	8.9	34.3
Uplift to ERV1	3.1	-	(0.1)	0.2	3.2
Total	7.0	1.6	19.8	9.1	37.5
% increase/(decrease) possible	80%	0%	(1)%	2%	9%
From vacant space	7.4	-	-	-	7.4
Total	14.4	1.6	19.8	9.1	44.9
Rent subject to break or expiry
Financial year ended 31 March	2020	2021	2022-24	>2024	Total
	€'m	€'m	€'m	€'m	€'m
Contracted rent	1.9	2.7	13.6	-	18.2
Uplift to ERV	0.7	-	(0.3)	-	0.4
Total	2.6	2.7	13.3	-	18.6
% increase/(decrease) possible	37%	-	(2)%	-	2%
Total reversion from review and break/expiry (excluding vacancy)
Total contracted rent	5.8	4.3	33.5	8.9	52.5
Total uplift to ERV	3.8	-	(0.4)	0.2	3.6
% increase/(decrease) possible	53%	-	(1)%	2%	7%
% increase possible including vacancy					21%

1. ERV uplift includes all 'in-place' office and industrial potential uplifts and excludes the Group's residential units. The Group may develop some of these properties in the longer term and therefore these reversions may not be obtained.

Property-related capital expenditure ('capex')

Capital expenditure on the investment portfolio analysed to allow an understanding of the investment in the portfolio during the period. Analysis of capex is in note 16 to the consolidated financial statements.

Directors and Other Information

Directors	Daniel Kitchen (Chairman) Colm Barrington (Senior Independent Director) Roisin Brennan Thomas Edwards-Moss (CFO) Margaret Fleming (appointed 20 January 2020) Stewart Harrington Grainne Hollywood (appointed 5 November 2019) Frank Kenny Kevin Nowlan (CEO) Terence O'Rourke
Company Secretary	Sean O'Dwyer
Assistant Secretary	Sanne Corporate Administration Services Ireland Limited t/a Sanne 4th Floor 76 Lower Baggot Street Dublin D02 EK81 Ireland
Registered office	1WML Windmill Lane Dublin D02 F206 Ireland
Company number	531267
Independent auditor	Deloitte Ireland LLP Chartered Accountants and Statutory Audit Firm Deloitte & Touche House 29 Earlsfort Terrace Dublin D02 AY28
Tax adviser	KPMG 1 Stokes Place St. Stephen's Green Dublin D02 DE03 Ireland
Independent Valuer	Cushman & Wakefield 164 Shelbourne Road Ballsbridge Dublin D04 HH60 Ireland
Principal banker	Bank of Ireland 2 Burlington Plaza Burlington Road Dublin D04 X738 Ireland

Depositary	BNP Paribas Securities Services, Dublin Branch Trinity Point 10-11 Leinster Street South Dublin D02 EF85 Ireland
Registrar	Link Registrars Limited t/a Link Asset Services 2 Grand Canal Square Dublin D02 A342 Ireland
Principal legal adviser	A&L Goodbody 25/28 North Wall Quay IFSC Dublin D01 H104 Ireland
Corporate brokers	Goodbody Stockbrokers Ballsbridge Park Ballsbridge D04 YW83 Ireland Credit Suisse International One Cabot Square London E14 40J United Kingdom

Glossary

AIFis an Alternative Investment Fund

AGM isAnnual General Meeting

AIFMis an Alternative Investment Fund Manager

APMis an Alternative Performance Measure

Brexitis the UK exit from the EU

C&Wor Cushman and Wakefield or the Valuer are the Group's external independent Valuer

Cash passing rentis the gross property rent receivable on a cash basis as at the reporting date. It includes sundry items such as car parks rent and estimates of rents in respect of unsettled rent reviews.

CBDis Central Business District.

Contracted rentis the annualised rent adjusted for the inclusion of rent that is subject to a rental incentive such as a rent-free period or reduced rent year.

Developer's profitis the profit on cost estimated by valuers which is typically a percentage of developer's costs, usually between 10% and 25%.

Development construction costis the total costs of construction to completion, excluding site and financing costs. Finance costs are usually assumed at a notional 7% per annum by the Valuer.

DoFis the Department of Finance.

DPSis dividend per share.

DRiPor dividend reinvestment plan is a plan offered by the Group that allows investors to reinvest their cash dividends by purchasing additional shares on the dividend payment date.

EBITis earnings before interest and tax

EPRAis the European Public Real Estate Association, which is the industry body for European property companies. It produces guidelines for a number of standardised performance measures (e.g. EPRA earnings).

EPRA cost ratio (including direct vacancy costs)is the ratio of net overheads and operating expenses against gross rental income. Net overheads and operating expenses relate to all administrative and operating expenses net of any service fees, recharges or other income which is specifically intended to cover overhead and property expenses.

EPRA cost ratio (excluding direct vacancy costs)is the same as above except it excludes direct vacancy costs.

EPRA earningsis the profit after tax excluding revaluations and gains and losses on disposals and associated taxation (if any).

EPRA EPSis EPRA earnings on a per share basis (diluted)

EPRA NAV per shareis the EPRA NAV divided by the diluted number of shares at the period end.

EPRA net asset value ('EPRA NAV')is defined as the IFRS assets excluding the mark to market on effective cash flow hedges and related debt instruments and deferred taxation on revaluations.

EPRA Net Reinstatement Value ('NRV') is NAV calculated on a basis that assumes entities never sell assets and aims to represent the value required to rebuild the entity

EPRA net initial yield ('NIY')is the passing rent generated by the investment portfolio at the balance sheet date, less estimated recurring irrecoverable property costs, expressed as a percentage of the portfolio valuation as adjusted. The portfolio valuation is adjusted by the exclusion of development properties and those under refurbishment.

EPRA NNNAVis the EPRA NAV adjusted to reflect the fair value of debt and derivatives and to include deferred taxation on revaluations.

EPRA 'topped-up' net initial yieldis calculated as the EPRA NIY but adjusting the passing rent for contractually agreed uplifts, where these are not in lieu of rental growth.

EPRA vacancy rateis the Estimated Rental Value ('ERV') of vacant space divided by the ERV of the whole portfolio, excluding developments and residential property. This is the inverse of the occupancy rate.

EPS or earnings per shareis the profit after taxation divided by the weighted average number of shares in issue during the period

Equivalent yieldis the weighted average of the initial yield and reversionary yield and represents the return that a property will produce based on the occupancy data of the tenant leases.

ERV or estimated rental valueis the Valuer's opinion as to what the open market rental value of the property is on the valuation date, and which could reasonably be expected to be the rent obtainable on a new letting on that property on the valuation date.

Fair value movementis the accounting adjustment to change the book value of the asset or liability to its market value.

FRI leaseis a full repairing and insuring lease

Gale dateis the date on which rent is due

GDVis gross development value

GRESBis a sustainability benchmark for property assets.

Gross rental incomeis the accounting-based rental income under IFRS. When the Group provides incentives to its tenants the incentives are recognised over the lease term on a straight-line basis in accordance with IFRS. Gross rental income is therefore the passing rent as adjusted for the spreading of these incentives.

Hiberniais Hibernia REIT plc, the Group or the Company.

'In-place' portfoliois the portfolio of completed properties, i.e. excluding active development and refurbishment projects and land.

Internalisationrefers to the acquisition of the Investment Manager and the ultimate elimination of reliance on the external investment management function through bringing these activities inside the Group.

IFRSare International Financial Reporting Standards

IPOis the initial public offering, i.e. the first equity raising of the Company.

IPDis the Investment Property Databank Limited which is part of the MSCI Group and produces as independent benchmark of property returns (IPD Ireland Index) and which provides the Group with the performance information required in calculating the performance-based management fee.

IPMSare the international property measurement standards as issued by the Royal Institute of Chartered Surveyors

IRRis internal rate of return.

MSC Ireland Property Indexis the MSCI/SCSI/Investment Property Databank Limited Ireland Quarterly Property Index-All Property (the ''IPD Ireland Index'')

Lease incentiveis any consideration or expense, borne by the Group, in order to secure a lease.

LEED('Leadership in Energy and Environmental Design') is a Green Building Certification System developed by the US Green Building Council. Its aim is to be an objective measure of building sustainability.

Like-for-like ('LfL') rental income growthis the growth in net rental income on properties owned through the current and previous periods under review. This growth rate includes revenue recognition and lease accounting adjustments but excludes properties held for development in either financial year or properties with guaranteed rental reviews.

Loan to value ('LTV')is the ratio of the Group's net debt to the value of its investment properties.

Long-term incentive plan ('LTIP')aims to encourage senior management retention and align their interests with those of the Group through the payment of rewards based on the Group's long-term performance through shares in the Company that vest after a future period of service.

Market abuse regulationsare issued by the Central Bank of Ireland and can be accessed at https://www.centralbank.ie/regulation/securities-markets/market-abuse/Pages/default.aspx.

MSCI/SCSI Ireland Quarterly Property All Assets Index ('MSCI Ireland Index')is the index produced by MSCI which measures the return of the property market in Ireland for all asset classes and which is calculated by MSCI both including and excluding Hibernia assets and is used to calculate our KPI 'Total property return' or TPR.

NAVPSis the NAV in cent per share.

Net development valueis the external Valuer's view on the end value of a development property when the building is fully completed and let.

Net equivalent yieldis the weighted average income return (after allowing for notional purchaser's costs) a property will produce based on the timing of the income received. As is normal practice, the equivalent yields (as determined by the external Valuer) assumes rent is received annually in arrears.

Net lettable or net internal area ('NIA')is the usable area within a building measured to the internal face of the perimeter walls at each floor level.

Net reversionary yieldis the expected yield after the rent reverts to the ERV.

Occupancy rateis the estimated rental value of let units as a percentage of the total estimated rental value of the portfolio, excluding development properties.

Over rentedis used to describe when the contracted rent is higher than the ERV.

Passing rentis the annualised gross property rent receivable on a cash basis as at the reporting date. It includes sundry items such as car parks rent and estimates of rents in respect of unsettled rent reviews.

PC ispractical completion

Property income distributions ('PIDs')are dividends distributed by a REIT that are subject to taxation in the hands of the shareholders. Normal withholding tax still applies in most cases.

PRSis the private rental sector which refers to residential properties held for rent.

Psfis per square foot

RCFis revolving credit facility

REITis a Real Estate Investment Trust. Irish REITs follow section 705E of the Taxes Consolidation Act 1997.

Remuneration Policy:the remuneration policy approved by shareholders at the 2018 AGM and which took effect from 27 November 2018.

Reversionis the rent uplift where the ERV is higher than the contracted rent.

Royal Institute of Chartered Surveyors ('RICS') Professional Standards, RICS Global Valuation Practice Statements and the RICS Global Valuation Practice Guidance- Applications contained within the RICS Valuation - Global Standards 2019 (the 'Red Book') issued by the Royal Institute of Chartered Surveyors provide the standards for preparing valuations on property.

Sq. ft.is square feet

Tenant or lease incentivesare incentives offered to occupiers on entering into a new lease and may include a rent free or reduced rent period, or a cash contribution to fit-out. Under accounting rules, the value of these incentives is amortised through the rental income on a straight-line basis over the term of the lease or the period to the next break point.

Term certainis the lease period to the next break or expiry.

TMT sectoris the technology, media and telecommunications sector.

Total accounting return ('TAR')measures the absolute growth in the Group's EPRA NAV per share plus any ordinary dividends paid.

Total Property Return ('TPR')is the return for the period of the property portfolio (capital and income) as calculated by MSCI, the producers of the IPD Ireland Index.

Total shareholder return ('TSR')is the growth in share value over a period assuming dividends are reinvested to purchase additional units of stock.

Transparency regulationsenhance the information made available about issuers whose securities are admitted to trading on a regulated market and further information is available on https://www.centralbank.ie/regulation/securities-markets/transparency/Pages/default.aspx.

Under rentedis the term used to describe where contracted rents are lower than ERV. This implies a positive reversion after expiry of the current lease contract terms.

Ungeared IRRis the internal rate of return excluding gearing.

USPPis US private placement notes

Valueris the independent valuer appointed by the Group to value the Group's investment properties at the date of the consolidated financial statements. From September 2017 the Group has used Cushman and Wakefield. Previously the Group has used CBRE.

WAULTis weighted average unexpired lease term and is variously calculated to break, expiry or next review date.