Green REIT : Trading Statement

RNS Number : 1072D

Green REIT PLC

24 June 2019

Trading Update

Dublin, 24 June, 2019 | Green REIT Plc, ('Green REIT', or 'the Company'), issues a trading update for the period from 1 January 2019 to the date of this announcement.

Portfolio Update as at 24 June 2019

· Contracted annual rent now €79.4 million (31 December 2018: €75.5 million), or €83.3 million when rental income from lettings with terms agreed and in advanced discussions are included

· €7.8 million of additional annual rent, a 10% uplift on 31 December 2018 total contracted annual rent, secured or with terms either agreed or in advanced discussions, since 31 December 2018, through new lettings and rent reviews/renegotiations (see table below for details)

· WAULT of 8.5 years (31 December 2018: 8.7 years) including new leases and agreements for lease signed, which is unchanged when lettings with terms agreed or in advanced discussions are also included

· EPRA vacancy rate of 5.0% (31 December 2018: 3.5%) including new leases signed, or 0.7% when lettings with terms agreed or in advanced discussions are also included

· One new letting signed and terms agreed on a further two lettings at George's Quay Estate, which will bring it to full occupancy, with additional annual rent of €1.8 million (in line with ERV at 31 December 2018). These lettings will lead to a reduction in annual void costs of approximately €0.4 million

· Terms agreed for the retail space at One Molesworth Street, at an annual rent of €505,000, which will bring the building to full occupancy, delivering a total rent of €5.85 million per annum

· No acquisitions (other than four acres at Horizon Logistics Park previously announced) and no disposals since 31 December 2018

Development Update as at 24 June 2019

· Building I in Central Park completed in April 2019, ahead of budget, with one letting now complete for the top two floors and advanced discussions taking place with interested parties on the balance of the building, at a total annual rent of approximately €3.5 million, 9.4% ahead of most recent projection

· Bunzl unit (10,700 square metres (115,000 square feet)) at Horizon Logistics Park commenced in February 2019 and is due for completion in Q1 of 2020. Annual rent of €1.14 million, with projected total cost of €13.1 million (versus €15.1 million estimate in February 2019)

· Kuehne+Nagel triggered their options for an extension to the unit delivered to them in Horizon Logistics Park in April 2018 by 7,400 square metres (80,000 square feet), which is under construction and due for completion in Q1 of 2020. The annual rent on the extension will be approximately €0.71 million, subject to final measurement when built, with no rent free period. The lease duration on the extended unit (totalling 14,800 square metres (160,000 square feet)) is 15 years from April 2018, with a tenant break option 10 years from completion of the extension in Q1 of 2020. Estimated construction cost of €7 million for the extension

· Agreement signed with Vortex Aviation for unit D4 at Horizon Logistics Park at an annual rent of €0.43 million, on 4,160 square metres (44,800 square feet), for 20 years with first tenant break at year 10, and with nine months' rent free. Vortex Aviation is an aircraft maintenance company and part of the Kellstrom Group (US)

· Units D6 and D7 at Horizon Logistics Park now complete, on budget (€7.5 million). These units extend to 5,400 square metres (58,000 square feet) in total

· Planning consent granted in June 2019 for a 15,300 square metre (165,000 square feet) unit at Horizon Logistics Park

· Planning application to be submitted in Q3 2019 for three new blocks at Central Park, expected to exceed previous estimate of 37,200 square metres (400,000 square feet) of lettable space

Horizon Logistics Park, Dublin Airport

The extension underway for Kuehne+Nagel referred to above will bring their total footprint in the logistics park to 19,250 square metres (207,000 square feet), and highlights the attractiveness of the park to blue chip global logistics operators. Having bought the park in late 2013 with three units in place and with an annual rental income of €0.9 million, this additional unit, the tenth unit to be built by the Company, will bring the total number of units to 13, increasing the annual contracted rent to €6.5 million, or to €7.0 million including units D6 and D7 (on the assumption that they are leased at their 31 December 2018 ERVs).

Central Park, South Dublin

Building I, comprising 9,700 square metres (104,058 square feet), completed in April 2019, at a total cost of €32.5 million, compared with a budget of €34 million. Genesis Aircraft Services have signed a lease for the top two floors of the building which covers 2,410 square metres (25,941 square feet) and 38 car spaces, for 20 years, with a tenant break at year 12 and with a rent free period of 9 months. The Company is in advanced discussions with a number of interested parties for the balance of Building I, extending to 7,260 square metres (78,117 square feet). Subject to leasing this space on the terms being negotiated, the total annual rent from Building I will be approximately €3.5 million, 13% ahead of our most recent annual projection in February 2019 of €3.1 million. Central Park now comprises 88,300 square metres (950,000 square feet) of office space, with an annual contracted rent of €28.6 million including the new leases signed and lettings with terms agreed in Building I, which will bring the eight office buildings within the park to full occupancy.

Sale process

On 15 April 2019, the Company's Board announced that, following a comprehensive and carefully considered review of the strategic options to maximise value for its shareholders, a decision to immediately initiate a process for the sale of the Company or its portfolio of assets had been taken. Further announcements related to the sale process will be made as and when appropriate.

Gary Kennedy, Chairman of Green REIT plc, commented: 'The leasing success achieved to date in 2019 demonstrates the high quality of our portfolio and the very supportive backdrop of the market, which in quarter one of 2019 witnessed a new record level of take-up in the Dublin office market. Combined with the sustained low interest rate environment, the operating environment remains strong across both the occupier and capital markets.

'Our contracted annual rent is now up to €79.4 million, or €83.3 million when lettings from lease deals with terms agreed are included, representing an increase of 10% on the last reported contracted annual rent at 31 December 2018 of €75.5 million. New lettings in the period were 7% ahead of the ERV on a like-for-like basis, a further illustration of the favourable market conditions in which the Company operates. We are pleased with how the sale process announced by the Board in April is progressing and the level of interest expressed to date. We will provide a further update to shareholders as and when appropriate.'

Press enquiries
FTI Consulting (International) Claire Turvey	[phone]
Drury | Porter Novelli (Ireland) Billy Murphy	[phone] / [phone]

About Green REIT plc

Green REIT Plc is an Irish Real Estate Investment Trust ('REIT') and is listed on the Irish and London Stock Exchanges. The Company was the first REIT established in Ireland following the introduction of REIT legislation by the Irish Government. The Company's stated strategy is to create a property portfolio consisting primarily of commercial property in Ireland to deliver income and capital growth through opportunistic investments, active property management and prudent use of debt finance. Please visit www.greenreitplc.com.

This announcement contains inside information. The person responsible for arranging for the release of this announcement on behalf of Green REIT is Niall O'Buachalla, Company Secretary. The date and time of this announcement is the same as the date and time it has been communicated to the media.

Responsibility statement

The directors of Green REIT accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors (who have taken all reasonable care to ensure that such is the case) the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the Irish Takeover Panel Act 1997, Irish Takeover Rules 2013 (the 'Irish Takeover Rules'), if any person is, or becomes, 'interested' (directly or indirectly) in, 1% or more of any class of 'relevant securities' of Green REIT, all 'dealings' in any 'relevant securities' of Green REIT (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by not later than 3.30pm (Irish/UK time) on the 'business' day following the date of the relevant transaction. This requirement will continue until the date on which the 'offer period' ends. If two or more persons cooperate on the basis of any agreement, either express or tacit, either oral or written, to acquire an 'interest' in 'relevant securities' of Green REIT, they will be deemed to be a single person for the purpose of Rule 8.3 of the Irish Takeover Rules.

A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, can be found on the Irish Takeover Panel's website atwww.irishtakeoverpanel.ie.

Interests in securities arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Irish Takeover Rules, which can also be found on the Irish Takeover Panel's website. If you are in any doubt as to whether or not you are required to disclose a dealing under Rule 8, please consult the Irish Takeover Panel's website atwww.irishtakeoverpanel.ieor contact the Irish Takeover Panel on telephone number [phone].

Further Information

In accordance with Rule 19.9 of the Irish Takeover Rules, a copy of this announcement will be available on the Company's website at www.greenreitplc.com by no later than 12 noon on the business day following this announcement. The content of any website referred to in this announcement is not incorporated into, and does not form part of, this announcement.

This announcement is not intended to, and does not, constitute or form part of (1) an offer or invitation to purchase or otherwise acquire, subscribe for, tender, exchange, sell or otherwise dispose of any securities, (2) the solicitation of an offer or invitation to purchase or otherwise acquire, subscribe for, tender, exchange, sell or otherwise dispose of any securities, or (3) the solicitation of any vote or approval in any jurisdiction, pursuant to this announcement or otherwise.

The release, publication or distribution of this announcement in, into, or from, certain jurisdictions other than Ireland and the United Kingdom may be restricted or affected by the laws of those jurisdictions. Accordingly, copies of this announcement are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into, or from any such jurisdiction. Therefore persons who receive this announcement (including without limitation nominees, trustees and custodians) and are subject to the laws of any jurisdiction other than Ireland and the United Kingdom who are not resident in Ireland or the United Kingdom will need to inform themselves about, and observe any applicable restrictions or requirements. Any failure to do so may constitute a violation of the securities laws of any such jurisdiction.

J.P. Morgan Securities plc (which conducts its UK and Ireland investment banking business as J.P. Morgan Cazenove) is authorised in the United Kingdom by the Prudential Regulation Authority (the 'PRA') and regulated by the PRA and the Financial Conduct Authority. J.P. Morgan Cazenove is acting as financial adviser exclusively for Green REIT and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Green REIT for providing the protections afforded to clients of J.P. Morgan or its affiliates, or for providing advice in relation to any matter referred to herein.

J&E Davy ('Davy'), which is authorised and regulated in Ireland by the Central Bank of Ireland, is acting exclusively for Green REIT and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Green REIT for providing the protections afforded to clients of Davy or for providing advice in connection with the matters referred to in this announcement.

No statement in this announcement is intended to constitute a profit forecast for any period, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for the Company. No statement in this announcement constitutes an asset valuation. No statement in this announcement constitutes an estimate of the anticipated financial effects of an acquisition of the Company, whether for the Company or any other person.

NEW LEASES SINCE 31 DECEMBER 2018

Tenant	Status (on 24 June 2019)	Property	Lettable Area (Sq Ft)	Annual Rent (€m)
Confidential	Letting discussions advanced	Building I Central Park (Ground to 5th floors)	78,117
Genesis Aircraft Services	Signed	Building I Central Park (Floors 6 & 7)	25,941
Total - Building I Central Park			104,058	3.5
WeWork	Signed	George's Quay House, Dublin 2	17,139	1.0
Confidential	Terms agreed	George's Quay Plaza, Dublin 2	8,413	0.5
Confidential	Terms agreed	George's Court, Dublin 2	4,959	0.3
Total - George's Quay Estate			30,511	1.8
Kuehne+Nagel (Extension to unit D2)	Signed	Horizon Logistics Park, Dublin Airport	80,000	0.7
Vortex Aviation	Signed	Horizon Logistics Park, Dublin Airport	44,747	0.4
Total - Horizon Logistics Park			124,747	1.1
Confidential	Terms agreed	Retail Space, One Molesworth Street, Dublin 2	8,400	0.5
Polonez (shop)	Terms agreed	Arena Centre, Tallaght, Dublin 24	5,106	0.1
Total - New Leases			272,822	7.0

RENT REVIEWS/RENEGOTIATIONS COMPLETED SINCE 31 DECEMBER 2018

Tenant	Status	Property	Lettable Area (Sq Ft)	Previous Annual Rent (€m)	New Annual Rent (€m)
Maldron Hotel	Signed	Arena Centre, Tallaght, Dublin 24	87,436	0.3	0.6
Allied World Assurance	Signed	George's Quay Plaza, Dublin 2	7,567	0.2	0.4
Savills	Signed	33 Molesworth Street, Dublin 2	20,195	0.4	0.5
Total - rent reviews/regears			115,198	0.9	1.5

DEVELOPMENT CAPITAL EXPENDITURE UPDATE

Property	Use	Lettable Area (Sq Ft)	Delivery	Total Cost (€m)*	Capex to Complete (€m)**
1. Completed since 31 December 2018
Building I, Central Park	Office	104,058	Complete	32.5	4.6
Units D6, Horizon Logistics Park	Logistics	24,000	Complete	3.3	0.7
Units D7, Horizon Logistics Park	Logistics	34,000	Complete	4.2	1.2
Total - completed since 31 December 2018		162,058			6.4
2. Commenced since 31 December 2018
Unit D9 (Bunzl), Horizon Logistics Park	Logistics	115,000	Q1 2020	13.1	8.0
Unit D2 Extension (Kuehne+Nagel), Horizon Logistics Park	Logistics	80,000	Q1 2020	7.0	5.2
Total - commenced since 31 December 2018		195,000			13.2
3. Buildings completed in prior periods					8.1
TOTAL					27.7

* Estimate as at 24 June 2019

** Estimate of costs to complete at 24 June 2019

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