Interim Results

14 August 2020

Yew Grove REIT plc

(the "Company" or, together with its subsidiaries, the "Group")

Interim results for the six months ended 30 June 2020

The Company is today reporting its unaudited condensed consolidated results for the six month period ended 30 June 2020 (the "Period").

Strategic Highlights

• Portfolio investment properties independently valued on 30 June 2020 at €141.1 million, reflecting an annualised rent roll of €10.4 million at Period end

• Continued strong rent collections for Q2 and Q3 2020 of 97% and 98% respectively (over half of the remainder due under agreed payment plans)

• Quarterly dividend payments continued with total aggregate year-to-date dividend distribution per ordinary share of 2.45 cents paid for H1 2020

• Purchased six further buildings during the Period for €25.3 million

• Asset management has enhanced the Company's property portfolio and revenue, including €0.4 million received from a lease surrender and 40,000 square feet of office vacancy being let in early July 2020

• 100 million share issuance programme refreshed at EGM in May 2020

• Strong pipeline of potential acquisitions identified

Financial Highlights

• Net Asset Value ("NAV") per ordinary share was 97.39 cents as at 30 June 2020 (31 Dec 2019 98.52 cents)

• Portfolio valuation on 30 June 2020 of €141.1 million (31 December 2019: €115.8 million)

• Period end valuation shows a fall in value of €15,000 (0.01%) from the aggregate of the 2019 year end valuation and the price of the 2020 property purchases

• Annualised rent roll of €10.4 million at Period end (31 December 2019: €8.9 million) increasing to €11.1 million within a month of Period end

• Period net revenues were €5.3 million, including €0.15 million of lease surrender premium payments. Excluding lease surrender premium payments, this shows an increase of 51% on H1 2019

• Expenses excluding variable remuneration reserves were €1.3 million (H1 2019 €1.2 million)

• EPRA Earnings per share ("EPS") of 2.76 cents, 89% paid as dividends. Dividends paid for H1 of 2.45 cents per share (H2 2019: 2.42 cents)

• Credit facility drawings increased from €20.8 million to €40.4 million over the Period, leaving additional undrawn headroom of €8.8 million and cash of €9.5 million

Portfolio Highlights

The Group's properties as at as at the last trading update (15 July 2020) benefit from attractive leases:

• Weighted average unexpired lease terms of 4.6 years to break and 7.7 years to expiry

• Strong tenant covenants: (25% Government and other State Bodies as tenants, 67% FDI, 4% Large Enterprises and 4% SME by rent roll)

• Gross yield at fair value of 7.9%, with a gross reversionary yield of 8.9% (7.7% and 8.7% respectively at 31 December 2019)

• Reversionary rent roll of €12.6 million

Jonathan Laredo, Chief Executive Officer, commented:

"In the first half of 2020, Ireland has suffered lock-down and is now coming to terms with the 'new normal'. Like everybody in the country, we hope that the economy recovers quickly and that the damage caused to businesses and personal livelihoods by Covid-19 is both limited and temporary. Despite the strains imposed on businesses by the crisis, the strength of our tenant covenants continues to be reflected in the robust performance of our rent roll and the stability of our portfolio valuation. The Company has increased its asset portfolio and rent roll, completed major lettings and associated asset management works and continued to deliver quarterly dividends to shareholders. We have a programme of further asset management works underway and a pipeline of accretive investments identified.

"Yew Grove REIT is the only REIT predominantly focussed on investing in the office and industrial sectors of the Irish real estate market outside of Dublin's traditional central business district. The Company's focus on the credit and business of all our tenants has been reflected in strong collections and stable portfolio value in a global crisis period. This validates Yew Grove REIT's differentiated strategy, targeting well tenanted commercial real estate and I look forward to continuing this in the second half of the year."

For further information contact:

Forward-looking Statements

Certain information contained in this announcement may constitute forward looking information. This information relates to future events or occurrences or the Company's future performance. All information other than information of historical fact is forward looking information. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "predict" and "potential" and similar expressions are intended to identify forward looking information. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking information. No assurance can be given that this information will prove to be correct and such forward looking information included in this announcement should not be relied upon. Forward looking information speaks only as of the date of this announcement. The forward looking information included in this announcement is expressly qualified by this cautionary statement and is made as of the date of this announcement. The Company and its group does not undertake any obligation to publicly update or revise any forward-looking information except as required by applicable securities laws.

Notes to editors

Yew Grove REIT plc, quoted on the London Stock Exchange's AIM market and on the Euronext Growth Market in Dublin, is an Irish commercial real estate company invested in a diversified portfolio of Irish commercial property. Yew Grove has a particular focus on well-tenanted commercial real estate assets comprising of office and industrial assets outside of Dublin's Central Business District.

Yew Grove's highly experienced team has a proven track record in commercial property investment and asset management in Ireland and internationally and is focused on delivering results. Its investment approach is strategic, not speculative, principally on assets that are let, pre-let or to be let after refurbishment. Shareholders are provided with stable, long-term income from a diverse portfolio of commercial property comprising well-tenanted real estate in strategic centres let to Irish government entities and other state bodies, IDA Ireland supported and other FDI companies, and larger corporates. 

Chief Executive Officer's Statement

I am delighted to introduce the interim report and unaudited condensed consolidated financial statements of Yew Grove REIT plc (the "Company" or "Yew Grove") for the six months ended 30 June 2020.

Economic Outlook

Covid-19

2020 has been dominated by the Covid-19 pandemic. Ireland's open, outward facing economy is almost uniquely embedded in and dependent on, the health of global businesses, particularly multinationals. The attractions of a young, well-educated and highly skilled working population and an open economy situated in one of the world's largest trading blocs has over the past decade proved a huge attraction for global business. That together with IDA Ireland's focus on attracting high growth business sectors in technology, life sciences and technical engineering has helped reinvigorate the economy and been the driver of the country's success as it recovered from the global financial crisis.

Today Ireland faces the challenges of how to emerge from lockdown and how to adapt to the new normal. The effect of the virus on individuals' confidence will affect how people return to work and their daily interactions. The medium-term business outlook is also uniquely dependent on a number of interlinked geo-political, health and economic developments, none of which can be forecast with certainty. Whilst global markets appear to be recovering their poise after the second quarter convulsions that threatened the worst performance since the 1930s Great Depression, it is difficult to say with equanimity that that is also true of the underlying national or global economies. The fiscal stimuli released across the world have temporarily insulated many people from the effects of unemployment. However, as that support ends there are large swathes of the economy which depend upon individuals spending, and while that can be encouraged by governments it requires increased consumer confidence. If the health crisis is not contained, or does not reach a natural conclusion, then a second wave or uncontrolled expansion of the outbreaks (such as may have been seen in the US, Brazil and India) could trigger further negative economic consequences as those countries and populations try to deal with their health concerns. On the other hand, if the capital markets are a harbinger of economic upturn then the Irish economy should be one of the best performers, with a more rapid exit and recovery than those countries with more domestically based economies.

Property Markets

After a busy first two and a half months of 2020, the country's economy and its commercial property markets slowed dramatically as Ireland followed most of the rest of Europe into lockdown in March.

Office Markets' activity

Savills reported that the first quarter for the Dublin office market was active, with take-up at 75% above the ten year run rate and net absorption (at 42,565 sq. metres) almost twice the ten year run rate which had resulted in vacancy falling to 8.1% from 8.6% at the end of 2019 (source: Savills Research, May 2020, 'Dublin Office Market'). As the lockdown hit, Savills estimate that of the 88,488 sq. metres of demand at the end of Q1, 15,460 sq. metres has fallen away and a further 13,730 sq. metres has been put on hold pending greater certainty on Covid-19, while the balance is proceeding and some of which has completed. However, not only did transactions continue during the second quarter but new tenant demands for space are beginning to emerge and we have seen recent evidence of multiple lettings in the North Docks, evidencing the continued health of the Dublin office market.

Outside of Dublin where the pandemic also presents health, social and economic concerns, the office market is fundamentally different (perhaps with the exception of Cork).

In Galway take-up rates were significantly constrained by the lack of suitable available space. There was less than 17,000 sq. metres of office vacancy, with only six units above 1,000 sq. metres and none above 2,000 sq. metres. Most of the limited take-up was in the better Grade A buildings. Vacancy rates across all grades and availability sits at 5.5%. The continued lack of suitable space and the strength of local business demand has launched office development, which is expected to supply c. 26,000 sq. metres, split between the city centre and suburbs which, on expected delivery in 2021/22, should help to restart the market.

In Limerick, a busy 2019 continued into the first quarter of 2020 and saw the vacancy rate fall to 10.5% from 13% a year previously, the lowest on record (source: Cushman & Wakefield 'Limerick Office Market Q1 2020'), with the net vacancy rate at 9.3%. Approximately half of the available space is Grade A, the majority of which was under discussion for occupation in March and it is expected that this net vacancy will continue to trend lower towards the end of 2020. After a flurry of development in 2018/19 there is currently no further development underway, but a number of planning applications were underway and as the city emerges from lockdown and the existing space is absorbed, it is expected that development should restart.

Cork, which was the most developed of the regional markets, saw most of its late 2019 and early 2020 take-up concentrated in the city centre. Vacancy rates across the city fell to 8.9% in Q1 2020 from 9.4% in Q4 2019 with net vacancy at 4.7% and most of the reserved space being Grade A, principally in the city centre. Speculative development continues in the city centre where only 19% of the space slated for delivery in 2021 and 2022 is reserved.

Industrial markets' activity

The industrial market across the country has, for the past few years, seen shrinking vacancy, increased take-up and rising rents. The first quarter saw take-up in the Dublin market at over 32% above the long run average with new builds accounting for 18% of that take-up. Vacancy rates in logistics remain very low at 2.6% by the end of the first quarter, speculative development is increasing, but at a slower rate than demand.

In Galway the lack of space continues to constrain activity. Total vacancy (22,950 sq. metres) stands at 4.8%, with under 8,500 sq. metres of Grade A space, only one unit above 5,000 sq. metres and only six units above 1,000 sq. metres. Despite high levels of demand for space, rental yields do not support speculative development and the only development activity has been and continues to be design and build.

Limerick saw an active quarter and vacancy levels fell to 10.3%, (91,750 sq. metres), the lowest for a number of years of which Grade A accounted for 20%. The increase in activity in 2019 and the first quarter of 2020 has triggered development, with approximately 44,740 sq. metres under construction of which 31% is speculative, principally in Shannon.

Cork also saw strong levels of take-up in the first quarter with owner occupiers leading the way. Vacancy levels (65,400 sq. metres) have fallen to 5%, a multi-year low which suggest an inflection point in the market. Development activity has been limited with some speculative development where properties have been quickly let and some design and build.

Office market outlook

Across the globe the key question facing office occupiers, especially in large cities where workers have crowded, often lengthy commutes, is how their offices will be used in the post Covid-19 environment. In Ireland, as in much of the rest of Europe, office-based employees and employers have been through an enforced experiment in working from home with meetings almost exclusively done remotely by phone or via video link. The debate about how this will impact the future of the office has begun in earnest and that future will be made manifest over the next few years; but for now a number of issues are beginning to emerge and are covered in depth by the larger property specialists.

Anything said here has to read with the caveat that any future direction will largely be driven by the course of the pandemic and whether an effective, available vaccine can be found. However, it is likely that unless that happens soon the experience will affect generational behaviour and we should expect that to change employers' office plans. Looking at some of the more obvious issues and their potential solutions it looks as if the office of the future could well look more like the office of the past with open plan layouts giving way to partitioned space, and that the principal property impact of this crisis will be on large offices in large cities.

Employee health concerns will drive change. So, for example, social distancing and sanitation will become more important, especially in multi-let buildings where there are shared facilities such as toilets or where lifts are relied on for entry or exit. Tenants are likely to want to control all facilities within their own demise, which could spell a material reduction in demand for the co-working model. Similarly, we expect that the move to increasingly air-conditioned offices will slow and potentially reverse. Given the significant expense of improving existing air conditioning systems to hospital filtration standard or negative pressure (allowing for separate areas to remain uncontaminated by recirculated air flow) it is likely that naturally ventilated spaces or air conditioning that works with natural ventilation will become more popular and be seen as preferable.

The past few years have seen occupational density increase, especially in city centre offices. Dublin was a relative late comer to this process, but until the Covid-19 pandemic higher future densities were expected. Last year the average density per employee in Dublin was c.10.3 sq. metres and newer designs envisaged that shrinking to c.5 sq. metres. It is likely that the move back to less densely designed spaces (already seen in the US with planning for minimum densities of 10.2 to 10.4 sq. metres) will become the norm and there is likely to be less focus on, and a reversal of, open plan/shared or communal space and increased cellularisation. Dublin, unlike many other large European cities, does not have many high rise or very large office blocks, but the lack of parking facilities and the challenges of commuting may lead to some change on the future.

At least in the short term there is likely to be a move away from the use of public transport in favour of private motor vehicles, walking or cycling to work. The lack of parking in central Dublin and the Dublin commute distances makes suburban offices (provided they have suitable parking and changing/showering facilities) more attractive for employees until increased protection or an effective vaccine gives people more confidence to return to public transport. The cost benefits in paying suburban versus city centre rents makes the attractions to employers even more transparent.

In Dublin it looks as if the health crisis could move the office market to smaller, more manageable floorplates (allowing single tenancy occupation) and buildings with fewer floors. For Dublin city centre offices, we expect that the best properties should fare relatively well as while there is an active Grade A development pipeline, much of this is already spoken for. It is likely that secondary and tertiary city centre buildings will increasingly have to compete with "Core+" (Dublin 1,3,7 and 8) or suburban locations. This could reduce demand for, or rent pressure on, Core+ property which has over the past few years been the fastest growing office rental market in the country, while providing a boost for good quality, well sited, suburban business parks, especially those buildings that are accessible, modern and do not require extensive capital investment.

Several large employers have begun to explore 'hub and spoke' working patterns with a hub at a centralised head office (used by senior management or for meetings where a central location is most convenient and face to face meetings are more productive than virtual ones) and suburban spoke offices which allow staff shorter and more manageable commutes to more easily managed, cheaper buildings. It is probable that this will be a predominantly Dublin solution given the small size of the regional cities and towns where offices are often situated in the suburbs and where public transport is not extensively relied on for commuting. In most regional locations we expect that offices will be used in some sort of combination with flexible home working arrangements for those employees whose role and personal circumstances make that attractive and productive.

In the regional markets, given the lack of availability and general age of most occupied buildings we expect two principal changes. First, occupiers will look to have their buildings upgraded to make them safer and more convenient to use. This is likely to marginally increase rents, but given the capital outlays involved will probably be net neutral for owners. However, there will be ongoing demand for new space of an appropriate quality and size to suit larger tenants. For most businesses, working from home is not an alternative to the office, but if formally arranged it might reduce pressure to expand and therefore slow rental growth in what are already severely constrained markets. On balance we expect the effect to moderate the speed of rental growth rather than to soften rental levels. Given the rent required to justify development the underlying pressure is still upward. We have already seen this in Limerick as rents for Grade A property have moved above €20 psf from €19.40 psf in 2019 and could continue to rise to c. €25 psf. We expect the same effect in Galway where development is just beginning and that will slowly affect the smaller markets and IDA Ireland business parks. Cork has a large volume of mostly speculative city centre development and it remains to be seen how post Covid-19 conditions affect that city's property markets. Depending on how the Cork centre performs post-Covid-19, we expect to see a true centre/suburban market develop with Mahon Point and potentially the Airport Business Park emerging as the best suburban options and providing a cheaper alternative to the central prime offices. Rents in the city centre are currently running at c. €30 psf to €35 psf and a two speed market will see suburban rents at between €16 psf and €22 psf.

Industrial market outlook

The effect of the Covid-19 pandemic on future property market developments is more straightforward for the industrial market than the office market. One of the most active parts of the industrial market over the past few years has been in owner occupiers or small businesses looking for space in smaller buildings (up to 5,000 sq. metres). The principal effect of the Covid-19 pandemic on this sector is likely to be on domestic businesses that have, in the main, been renting or buying the smaller, older properties. Ireland is a predominantly non-manufacturing economy and most of those businesses are driven by the strength of the domestic economy and that has suffered a recent reverse. In contrast the market for the largest and most modern buildings that are needed for logistics operations has been boosted by the rapid move online by a number of businesses. Demand is generally strong and expected to stay strong for high bay buildings of over 10,000 sq. metres.

Yew Grove's existing industrial assets (and most of its industrial pipeline) are buildings used by the life science sector (often fitted out by the tenant with specialist labs and costly internal specification requirements) or a part of the sector's supply chain (used for packaging of drugs and similar activity) where the buildings are older and less attractive for logistics businesses but large enough to suit supply chain businesses (5,000 to 10,000 sq. metres).

The likely effect of the Covid-19 pandemic on the industrial occupier market will be a reduction in demand for smaller, older premises, allied with continuing pressure for large, high bay, modern buildings, while demand for bespoke accommodation will probably be satisfied by design and build contracts. As such I would expect upward rent pressure to continue in the prime market but to moderate for mid-size buildings and potentially fall for smaller, older buildings. Where demand leads to design and build solutions we will see pressure for rents to rise to meet the cost of development.

The industrial investment market has attracted support and focus from international buyers. That increased recently with M7 Real Estate investing heavily and Arrow Capital Partners of Australia announcing a new focus on Irish industrial properties. It is expected that this market will see little, if any, contraction and will continue to see discount rates hold steady.

Yew Grove Activity

Despite the complications and disruption to our business caused by Covid-19 the Company maintained a high level of activity in the six months to 30 June 2020.

Financial review

The Company's strong focus on rent collection since the start of lockdown (March 2020) has been reflected in strong collections for the second and third quarters of the year which were disclosed via RNS earlier in the year. The Company monitors payments due on a daily basis in the period approaching gale dates, both for receipts and relative timeliness of payments. All tenants were contacted to confirm their current use of the Company's buildings and their expectations of the effect of the pandemic on their business. The Company had collected 97% of second quarter rents by 5 June 2020, with 1.9% of the balance being deferred under a repayment plan and the remainder due from non-food retail outlets that had been closed for the period. Third quarter collections due on 30 June 2020 were 98% collected, with 1.3% deferred under a payment plan and 0.7% due from non-food retail units that re-opened in June.

During the period the Group acquired six buildings at Millennium Park, Naas for €25.3 million and purchase costs of €2.1 million. The Company's external valuer, Lisney, re-valued the Company's properties at 30 June 2020 at €141.1 million, showing an increase in property assets of 22% from €115.8 million as at December 2019. Fair value losses in the period were €1.8 million, reflecting €2.1 million costs of purchasing the Millennium Park buildings and €0.3 lease surrender dilapidations received on the Company's Holly Avenue property.

The Group's revolving credit facility increased to €40.4 million over the period with undrawn headroom of €8.8 million at period end. The Company has at all times remained within its revolving debt facility banking covenants. Cash on deposit was €9.5 million, an increase of €2.0 million from 31 March 2020.

The period end NAV of 97.39 cents per share represents an 1.1% fall on the 31 December 2019 NAV of 98.52 cents per share. The fall was chiefly attributable to the costs of purchase of the Millennium Park buildings.

The Group's net revenues for the period were €5.3 million, including €0.15 million of lease surrender premium payments. Excluding lease surrender premium payments, the Group's revenues show an increase of 51% on H1 2019.

Expenses excluding variable remuneration reserves were €1.3 million as compared with H1 2019 comparable expenses of €1.2 million. The Company's headcount over the -period increased from six to seven employees, with a further employee joining in July, the additional expense of the employee joining in July will be partially offset by the internalisation of certain previously out-sourced activities.

The Company continued to pay quarterly dividends, with a dividend for the fourth quarter of 2019 of 1.04 cents per share in March 2019, later declaring Q1 and Q2 dividends in March 2020 and June 2020 of 1.20 cents and 1.25 cents respectively. Distributions to shareholders declared during the period (including the interim dividend declared in June 2020) amounted to 3.49 cents per ordinary share.

Asset Management review

In February 2020 we completed the purchase of six buildings at Millennium Park, Naas, County Kildare for a price of €25.3 million plus costs. One of the buildings, Birch House, was vacant (subsequently let in July) and the others were already fully let to a range of large companies and multinationals. At the same time we increased the revolving loan facility with Allied Irish Bank PLC to €49.1 million, €17.6 million of which was drawn for the Millennium Park purchase.

In March 2020 the Company agreed a re-gear of the OPW lease for 12,290 sq. ft. of office space at our property in Old Mill Lane in Listowel. The re-gear removed the July 2022 break option, extending the lease to July 2027 in exchange for a c.€4 per sq. ft. reduction in rent. The transaction brought the passing rent more in line with market and the new lease improved the WAULT and by lengthening the lease made the property more attractive to purchasers.

The Company also signed a ten year lease with the North Cork Enterprise Board in March for their space in Blackwater House, Mallow at €14 per sq. ft. (an increase of more than 25% to the previous rent) which reflects our continuing push to improve the quality and value of the building which goes hand in glove with our activity to lease the remaining 29% vacancy in that building.

In May 2020, whilst in the middle of lockdown, the Company completed the surrender of the lease at 13 Holly Avenue, on the Stillorgan Industrial Park, Dublin. This industrial building of 16,990 sq. ft. is one of two connected buildings which were occupied by Diasorin; an Italian biotech multinational. Under the surrender agreement, Diasorin paid a sum equal to all rent due to the lease end (February 2021) as well as €300,000 in lieu of dilapidations. The property is fully fitted as a high specification med-tech industrial space and is currently being marketed (together with the adjoining property) for rent or sale. Recent indications following the partial reopening of the country are positive.

The Company also completed the partial surrender and re-let of part (10,540 sq. ft.) of Unit A, IDA Ireland Business and Technology Park, in Garrycastle, Athlone. The building had been wholly let to Signature Orthopaedics Europe Ltd (a subsidiary of an Australian orthopaedic company) and the surrendered part has been let to KCI Manufacturing (a subsidiary of 3M). KCI already occupies Buildings B1 and B2 which sit adjacent to this building and the let satisfies KCI's immediate expansion plans. The new lease is for five years, coterminous with the KCI's other leases and the rent, of €9.29 per sq. ft., is at a 24% premium to the previous rent.

In July 2020, just after the period end, the Company agreed a new lease over its vacant retail space at Unit 24 in the Bridge Centre, in Tullamore. The unit is a prime, 750 sq. ft. unit at the front of the centre. The lease, to EBS, the mortgage specialist subsidiary of AIB PLC, is for ten years with a break at five years for an annual rent of €25,000 which is line with our pre Covid-19 estimate of ERV. It also means the Company's retail units at the Bridge Centre are fully let.

Additionally in July 2020 the Company agreed a lease with Aldi Stores (Ireland) Limited to lease Birch House in its entirety. Birch House at Millennium Park, Naas, County Kildare is a modern three storey office block, designed by Scott Tallon Walker and comprises 40,333 sq. ft. of open plan space constructed around a three-storey atrium. The lease term is fifteen years with a break option at ten years at a headline rate of €16.50 per sq. ft. plus €200 per car park space per annum. We are pleased that we managed to let the building within five months of buying the property despite the lockdowns caused by Covid-19 and at a rent level that reflects our view of the prevailing market rate for Millennium Park. The transaction is one of the largest seen this year outside of Dublin. A number of break options which expired in the period have not been exercised at Millennium Park (Naas), the Bridge Centre, (Tullamore) and Blackwater House (Mallow) and extension options have been exercised at our Gateway (Dublin D3) and Waterford (IDA Ireland Business and Technology Park) properties. These have contributed to the portfolio WAULT to break being at 4.6 years both at 30 December 2019 and at 15 July 2020 over six months later.

The progress mentioned above gives us a portfolio with the following characteristics as at 15 July 2020, excepting value which is as at 30 June 2020:

* As at the 30 June 2020 valuation date, the Lisney portfolio valuation is subject to "material valuation uncertainty" as set out in VPS 3 and VPGA 10 of the RICS Red Book Valuation - Global Standards, due to the unprecedented circumstances surrounding COVID-19. This set of circumstances is not unique to the Company and the material valuation uncertainty reported within the Lisney portfolio valuation is in line with the RICS material valuation uncertainty recommendation to all RICS registered property valuers as at the valuation date.

Throughout the period we have moved forward with our Environmental, Social and Governance (ESG) plan under which we have engaged all of the occupiers in our buildings to install advanced building management systems, to measure water and power usage and waste disposal processes with an eye to improving the energy efficiency and cost of running the buildings. We are also rolling out a building improvement plan to upgrade mechanical and electrical systems ("M&E"), environmentally friendly landscaping and, where relevant, improved building fabric, to improve the BER ratings and make the properties better and more attractive places to work. This is an ongoing project which we hope will improve the value of the buildings and make them more efficient for tenants whilst reducing their effect on the environment.

Governance

The Board met a number of times during the period for its quarterly meetings, to consider the impact of the Covid-19 pandemic on the Company, to review property purchases, significant lease events, debt facility increases and to agree dividends for 2019 and 2020 to date. The Board agreed to appoint Liberum Capital Limited as joint corporate broker and Nominated Adviser and Goodbody Stockbrokers UC as Euronext Growth Adviser. The Company's AGM was held, at which all resolutions were passed by shareholder vote, following which an EGM was held at which the Company's shareholders approved the Company's share issuance program of 100 million shares for a year. All of the Board committees met during the period and the Remuneration Committee agreed the 2020 grant of awards under the Company's Long Term Incentive Plan.

On behalf of the Board of Yew Grove I would like to thank all of our shareholders for their continuing support and trust that our activities over the next few years will reward you.

Jonathan Laredo

Chief Executive Officer

13 August 2020

Unaudited Condensed Consolidated Statement of Comprehensive Income

For the six months period to 30 June 2020

Unaudited Condensed Consolidated Statement of Financial Position

As at 30 June 2020

The Unaudited Condensed Consolidated Financial Statements were approved by the Board of Directors on 13 August 2020 and were signed on its behalf by:

________________ _________________

 Charles Peach Jonathan Laredo

 Chief Financial Officer Chief Executive Officer

 13 August 2020

Unaudited Condensed Consolidated Statement of Changes in Equity

For the six month period to 30 June 2020

For the six month period to 30 June 2019

Unaudited Condensed Consolidated Statement of Cash Flow

For the six month period to 30 June 2020

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Accounting policies

1.1 General information

Yew Grove REIT plc (the "Company"), with registered number 623896, together with entities controlled by the Company (its subsidiaries) (together the "Group"), is engaged in investing in a diversified portfolio of Irish commercial property with a view to maximising its shareholder returns.

The Company is a public limited company, incorporated and domiciled in Ireland. The registered address of the Company is 4th Floor, 76 Lower Baggot Street, Dublin 2.

The ordinary shares of the Company were admitted to trading on the Euronext Growth Market (formerly the Enterprise Securities Market) of Euronext Dublin and the Alternative Investment Market of the London Stock Exchange on 8 June 2018.

1.2 Trading period

The Unaudited Condensed Consolidated Financial Statements of the Company's reporting period are for the six month period to 30 June 2020.

The results are inclusive of the parent company (Yew Grove REIT plc), its subsidiary company and its joint venture (Note 21) for the six month period to 30 June 2020.

1.3 Going concern

Based on financial projections which extend beyond twelve months from the date of the approval of these financial statements, the Directors consider that the Company and Group has adequate resources to continue in operational existence for the foreseeable future. The Company has acknowledged the risk factors of the current economic environment in the risks and uncertainty section of this report. The Company has shown a market leading rent collection rate of greater than 95% of rents due in the first three quarters of 2020 and expects this to continue. The 30 June 2020 valuation has shown the Company's property portfolio to be independently valued close to the aggregate of the December 2019 valuation or if purchased since then, the purchase price. The Company continues to be in compliance with its debt finance facility covenants, has the ability to draw further on the current facility and has cash on hand. For this reason, the Directors have concluded that they should prepare the unaudited condensed consolidated and company financial statements on a going concern basis.

1.4 Basis of preparation

The Condensed Consolidated Financial Statements for the six month period to 30 June 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the European Union. The Condensed Consolidated Financial Statements should be read in conjunction with the Report and Consolidated Financial Statements for the year ended 31 December 2019. The accounting policies, significant judgements, key assumptions and estimates applied by the Group in these Condensed Consolidated Financial Statements are consistent with those applied in the Report and Consolidated Financial Statements for the year ended 31 December 2019 except where amended for IFRS 15, IFRS 16 and IFRS 2. They do not include all disclosures that would otherwise be required in a complete set of financial statements.

The information for the year ended 31 December 2019 does not constitute statutory accounts as defined in the Companies Act 2014. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis.

The accounting policies noted below are consistent with those of the Company's annual financial statements for the year ended 31 December 2019 which are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the Companies Act 2014.

The interim figures for the period ended 30 June 2020 and the comparative results for the period ended 30 June 2019 are unaudited but have been reviewed by the independent auditor. The interim financial statements herein are non-statutory financial statements for the purposes of the Companies Act 2014 and are approved by the Directors for issue on 14 August 2020.

The Condensed Consolidated Financial Statements are presented in Euro, which is the Company's functional currency and the Group's presentational currency.

New standards, interpretations and amendments adopted by the Group

Several amendments and interpretations apply for the first time in 2020, but do not have an impact on the interim condensed consolidated financial statements of the Group.

2. Segment reporting

The Group is organised into two business segments, against which the Group reports its segmental information. These are Office Assets (including retail and mixed use buildings) and Industrial Assets. All of the Group's operations are in the Republic of Ireland. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers, who have been identified as the Board of Directors of the Company.

Unallocated income and expenses are items incurred centrally which are neither directly attributable nor reasonably allocable to individual segments. Unallocated assets are cash and cash equivalents, and certain other assets.

The Group's key measures of performance for a segment are net rental income and the movement in fair value of properties, as these measures illustrate and emphasize that segment's contribution to the reported profits of the Group and the input of that segment to earnings per share. By focusing on these prime performance measures, other key statistical data such as capital expenditure and one off exceptional items are separately highlighted for analysis and attention.

Revenue as stated in the Consolidated Statement of Comprehensive Income relates to rental income from its investment in commercial properties held by the Group, license income from the licensing of the Group's car park spaces and service charges received by its subsidiary management companies.

Major Customers

Included in gross rental income are rents of €1.40m (2019: €1.35m) which arise from the Group's largest two largest tenants, each of which contributed more than 10% of the Group's revenue. No other single tenant contributed more than 10% of the Group's revenue in the same period in 2020.

3. Rental and related income

Gross rental income represents amounts receivable from tenants under leases associated with the Group's property business. Licence income represents amounts under licences receivable from tenants associated with the licensing of the Group's car park spaces. Service charge income relates to contributions from tenants of the Group's buildings for property expenses of the occupied buildings. Service charge income receivable from tenants is recognised as revenue in the period in which the related expenditure is recognised.

During the period, the Company agreed terms on the surrender of a lease at its property at Holly Avenue, Stillorgan, Dublin for €426,603, €126,603 for lease surrender and €300,000 for dilapidations (note 5). The lease surrender was completed on 8 May 2020. An additional surrender amount of €21,758 was received from a tenant who gave notice that they will exercise their lease break in 2021. In 2019 €2,000,000 was received for the surrender of a lease at Cork Airport with a further €1,000,000 in dilapidations (note 5).

During the period the voluntary liquidation of Yew Tree Investment Fund plc, was finalised (note 11).

4. Property expenses

Property expenses include service charges and other costs directly recoverable from tenants, and non-recoverable costs directly attributable to the Group's properties. Service charge expenses typically include security, insurance, maintenance, and other costs of managing the buildings due from and recharged to tenants. Direct property costs have increased due to vacancy in the portfolio.

5. (Losses)/gains on investment properties

A valuation of the Group's properties as at 30 June 2020 was completed by Lisney Limited ("Lisney") as external independent Valuer. Lisney prepared the valuation on the basis of market value in accordance with the Royal Institution of Chartered Surveyors ("RICS") Valuation - Global Standards (June 2017). Their valuation was subsequently reviewed by the Valuation Committee and is used unadjusted in these statements (Note 12).

During the period the company agreed terms on the surrender of a lease at its property Holly Avenue, Stillorgan, Dublin. The Company recognised a gain from the €300,000 dilapidations paid under the lease surrender. While it is expected that this will be used for works on this property, at the date of these financial statements, 13 August 2020, there were no committed works agreed on the vacated property. In the prior period dilapidations were received for the surrender of a lease at a property in Cork Airport.

6. AIFM fees

The Company is required as a REIT to have an Alternative Investment Fund Manager ("AIFM"). The Company has agreed with Ballybunion Capital Limited, an AIFM authorised by the Central Bank of Ireland, for it to act as the external AIFM of the Company, subject to overall supervision of the AIFM by the Board. The fees above are fees paid to the AIFM in accordance with the service level agreement between the AIFM and the Company.

7. Finance costs

The effective interest expense on borrowings arises as a result of the recognition of interest expense, commitment fees and arrangement fees on borrowings using the effective interest rate method. The interest expense has increased in the period due to the increase in the facility, as at 30 June 2020 the borrowed balance was €40.0million versus €20.4million in 2019 (Note 16).

8. Administration expenses

Profit before tax for the period has been stated after charging:

Staff costs represents total remuneration and other benefits paid to all employees for the period. Further information on Directors' remuneration can be found in note 22 to the Condensed Consolidated Financial Statements.

Other costs include items such as the Company's own office rent and general expenses, insurance, company secretarial, donations and non-recoverable VAT expenses.

9. Earnings per share

The basic total profit per ordinary share of 1.18 cents per share is based on the profit for the period of €1,313,252 and on 111,572,210 ordinary shares, being the time weighted average number of shares in issue during the period in accordance with IAS 33 Earnings Per Share. The diluted earnings per share of 1.17 cents per share is based on the dilutive effect of the outstanding share based payments (Note 22).

In 2019 the basic total profit per ordinary share of 5.81 cents per share is based on the profit for the period of €4,357,163 and on 75,000,000 ordinary shares, being the time weighted average number of shares in issue during the period in accordance with IAS 33 Earnings Per Share.

10. Employment

The average monthly number of employees (including Directors) directly employed during the period to 30 June 2020 in the Group was seven.

Total employees at period end:

The staff costs for the above employees were:

11. Liquidation of Fund

On 8 June 2018 the Company acquired 100% of the B ordinary share capital of the Yew Tree Investment Fund plc ("Fund"). The Fund was placed into Members Voluntary Liquidation. On 30 April 2020, the Group disposed of the Fund, the Directors of the Fund had previously engaged an Insolvency Practitioner with a view to carrying out a Members Voluntary Liquidation of the Fund. The assets of the Fund were transferred to the Company via this process.

12. Investment properties

During the six month period to 30 June 2020 the Group acquired a portfolio of six office buildings at Millennium Park, Naas, County Kildare (the "Portfolio") for €27.4 million (vendor price €25,300,000 and transaction costs of €2,053,330).

In 2019, six buildings were purchased and one non-core property was sold for a gain. The Company also developed a car park at one of its properties and did other minor development improvement works.

An external independent valuation is conducted on the Group's owned properties on 30 June and 31 December each year, based upon the key assumptions of estimated rental values and market-based yields. In determining fair value, the valuers refer to market evidence and recent transaction prices for similar properties.

The Directors are satisfied that the valuation of the Group's properties is appropriate for inclusion in the accounts. The fair value of the Group's properties owned at 30 June 2020 is based on the valuation provided by the external independent valuers, Lisney. This valuation is prepared on the basis of market value in accordance with the Royal Institution of Chartered Surveyors Valuation - Global Standards (June 2017) and the principles of IFRS 13 Fair Value. The valuers have included the following clause in their report: 'In considering the issue of Valuation Certainty, the outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a "Global Pandemic" on the 11th March 2020, has impacted many aspects of daily life and the global economy - with some real estate markets experiencing significantly lower levels of transactional activity and liquidity. As at the valuation date, in the case of the subject properties there is a shortage of market evidence for comparison purposes, to inform opinions of value. Our valuation of these properties is therefore reported as being subject to 'material valuation uncertainty' as set out in VPS 3 and VPGA 10 of the RICS Valuation - Global Standards. Consequently, less certainty - and a higher degree of caution - should be attached to our valuation than would normally be the case.'

This set of circumstances is not unique to the Company and the material valuation uncertainty reported within the Lisney portfolio valuation is in line with the RICS material valuation uncertainty recommendation to all RICS registered property valuers as at the valuation date. This valuation has not been adjusted by the directors in making their determination of the fair value of investment properties at 30 June 2020.

Fair value

The valuation technique used in determining the fair value of the property assets is market value as defined by the Royal Institution of Chartered Surveyors Valuation, being the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had acted knowledgeably, prudently and without compulsion. This is in accordance with IFRS 13.

The main inputs for property valuation using a market-based capitalisation approach are the Estimated Rental Value ("ERV") and equivalent yield. ERV is a valuer's opinion as to the open market rental value of a property on a valuation date which could reasonably be expected to be the achievable rent for a new letting of that property on the valuation date. ERVs a-re not generally directly observable and therefore classified as Level 3 inputs. Equivalent yields depend on the valuer's assessment of market capitalisation rates and are therefore Level 3 inputs. There were no transfers between fair value levels during the current and prior period.

Details of the Group's investment properties and information about the fair value hierarchy using unobservable inputs (Level 3) at the end of the reporting period are as follows:

30 June 2020:

30 June 2019:

Sensitivity of measurement to variance of significant unobservable inputs

A decrease in the ERV will decrease the fair value. An increase in equivalent yield will decrease the fair value. There are interrelationships between these rates as they are partially determined by market rate conditions.

The table below shows the sensitivity of the Group's properties to changes in ERV and equivalent yield, which have been identified as key sensitivities by the directors. A change in long term vacancy rate was not considered significant and was not therefore tested, as the Group's long-term vacancy rates are low and lease contracts are long in duration.

Across the entire portfolio of investment properties a 0.25% increase in equivalent yield would have the impact of a €5.035 million (2019: €3.165 million) reduction in fair value whilst a 0.25% decrease in yield would result in a fair value increase of €5.557 million (2019: €3.365 million), and a 5% increase in ERV would have the impact of a €5.971 million (2019: €4.225 million) increase in fair value whilst a 5% decrease in ERV would result in a fair value decrease of €5.695 million (2019: €3.975 million).

This is analysed by property class, as follows:

30 June 2020:

30 June 2019:

13. Trade and other receivables

Trade receivables include amounts due from tenants for rental and service charges. As at 31 December 2019 the Company had paid a deposit for the acquisition of six properties at Millennium Park, Nass which was completed in February 2020 (note 12).

The ECL allowance is calculated according to the provision matrix and totals €85,879. The balance of trade and other receivables has no concentration of credit risk as it covers mainly prepayments. The Directors therefore consider the carrying value of trade and other receivables approximates to their fair value.

Other receivables balance includes costs that have been incurred by the company and can be recovered from tenants under the terms of existing leases along with deposits and other amounts recoverable.

14. Cash and cash equivalents

Of the cash balance as at 30 June 2020 €2,801,297 is classified as restricted cash. As part of the company's facility agreement rent paid in advance on the secured properties is collected into a rent account controlled by the facility provider. The amount of this cash as at 30 June 2020 was €1,268,573 (2019: €639,424). Rent in excess of accrued facility interest is released at the end of each quarter to an account controlled by the Group. Dilapidation amounts received by the Group on secured properties total an additional €1,532,724 which was similarly held as restricted cash at the period end in line with facility banking covenants and other transaction agreements.

15. Trade and other payables

Trade payables includes amounts due to third party suppliers and prepaid rent amounts received from tenants in advance. Accrued expenses include operational expenses incurred but not yet invoiced to the Group as at 30 June 2020. Trade and other payables are interest free and have settlement dates within one year. The Directors consider that the carrying values of the trade and other payables approximate to their fair value.

16. Borrowings

The Group has a revolving credit facility with Allied Irish Bank plc ("AIB"), secured by fixed and floating charges over certain property assets. The facility is €49,094,000 (2019: €29,074,000) and can be repaid and re-drawn without penalty throughout its three year expected life. This loan facility was measured initially at fair value, after transaction costs, and carried at amortised cost, with all attributable costs charged to the Condensed Consolidated Statement of Comprehensive Income over the life of the facility.

The loan facility was drawn down in 2018, 2019 and 2020, there were no principal loan facility repayments during the period to 30 June 2020. Bank finance repaid during the period is the interest paid and due on the loan facility, similar to prior periods.

The Company stated in its Admission document the intention to target borrowings, following full investment of the net proceeds raised at Admission, of 25% loan-to-value ("LTV"). LTV is the ratio of drawn debt to the value of property investments, which at 30 June 2020 was 28.6% (2019: 20.1%). The company continues to monitor progress towards this target. Under the Irish REIT rules the Group's borrowings must not exceed 50% of the value of its assets.

The amount available to be drawn from the facility at the 30 June 2020 is 8,783,800 (2019: 8,283,260).

All borrowings are denominated in Euro. All borrowings are subject to six months or less interest rate changes and contractual re-pricing rates.

17. IFRS and EPRA NAV per share

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

EPRA net asset value ("EPRA NAV") is defined as the IFRS assets including properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term investment property business.

The Company's IFRS net asset value per ordinary share of 97.39 cents (2019: 98.52 cents) is based on equity shareholders' funds of €108,659,966 (2019: €109,922,541) and on €111,572,210 (2019: €111,572,210) ordinary shares, being the number of shares in issue at the period end.

18. Share Capital

The Group has authorised and issued share capital of 112m Ordinary Shares Issued.

* Share capital as at 30 June 2020 was fully paid. There is one class of ordinary share of one cent each.

19. Reserves

The equity of the Company consists of Ordinary Shares issued. The par value of the shares is recorded in the share capital account. The excess of proceeds received over the par value is recorded in the share premium account. Direct issue costs in respect of the issue of shares are accounted for in the retained earnings reserve, net of any related tax deduction. The share-based payment reserve reflects awards made under the LTIP.

20. Distributions made and declared

The declared Q2 2020 interim dividend on ordinary shares was declared on 29 June 2020 and paid to shareholders on 29 July 2020, as it was unpaid at period end it has not been included in the results to 30 June 2020.

21. Related Party Transactions

Subsidiaries

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

The following lists the subsidiaries of the Group:

The following lists the joint venture of the Group:

The joint venture had a break even result for the period to 30 June 2020 (2019: break even).

Associates

During the period the Company acquired a portfolio of six office buildings at Millennium Park, Naas Co. Kildare, following which the company has a holding in the management companies associated with those properties which are Naas Millennium (East) Management Company Limited by Guarantee, Naas Millennium (West) Management Company Limited by Guarantee and Osberstown Management Company Limited by Guarantee. The Company does not exert control over these entities, they have been classified as associates and do not form part of the consolidated Group.

22. Directors' remuneration

The Directors are considered to be related parties. No Director had an interest in any transactions which are, or were, unusual in their nature or significant to the nature of the Company.

The Directors of the Group received remuneration, fees and other benefits from the Group for their services. Total amounts for the period were €445,533 (2019: €428,798) of which €19,167 (2019: €nil) remained payable at the period end. No remuneration, fees or other benefits were paid to the Directors by any subsidiary or joint venture.

The remuneration of Directors and key management is determined by the Remuneration Committee to reflect the performance of individuals and market trends. Other benefits paid to the Executive Directors during the period includes health insurance. Defined contribution pension payments represent contributions on behalf of the Executive Directors. All fees paid to Non-Executive Directors are for services as Directors to the Group, they receive no other benefits. There were no payments of compensation made to Directors for termination or loss of office.

Share based payments

For the six month period ended 30 June 2020, the Group has recognised €75,024 of share-based payment expense from the 2019 Long Term Incentive Plan ("LTIP") award in the Condensed Consolidated Statement of Comprehensive Income. 

On 29 June 2020 the Remuneration Committee granted 785,000 share options to senior executives and staff under the LTIP. The exercise price of the options of €0.01 equals the nominal value of the underlying ordinary shares. The options' vesting is dependent on the Company's performance against two criteria, being Relative Total Shareholder Return ("TSR") for 50% of the options and Absolute Total Property Return for the remaining 50% of the options. The Company has set performance conditions for each criteria, 30% of options vest if performance equals the lower hurdle, 100% if at or above higher hurdle, the extent of vesting will be determined on a straight line basis where performance is between the hurdles.

Vesting is three years from the date of grant and requires the senior executive and staff to still be employed by the Company on such date. If the lower hurdles are not met, the options lapse. The vested options must be exercised within seven years of grant. The fair value at grant date is estimated using a Monte Carlo simulation pricing model, taking into account the terms and conditions upon which the options were granted. There is no cash settlement of the grant. The fair value of options granted during the period to 30 June 2020 was estimated on the date of grant using the following assumptions:

Dividend yield (%) 5.67 

Volatility (%) 38.44

Risk-free interest rate (%) 1

Vesting period of share options (years) 2.51 

Grant date share price (€) 0.75

While the TSR linked option values calculated are based on market based assumptions, the Absolute Total Property Return per share linked options, being non-market based, required management assumptions as to the probability of their respective hurdles being achieved.

For the period ended 30 June 2020, the Group has recognised €75,024 of share-based payment expense in the Consolidated Statement of Comprehensive Income.

23. Events after the reporting period

On 10 July 2020 the Company agreed a new lease over the vacant retail space at Unit 24 in the Bridge Centre, in Tullamore.

On 16 July 2020, the letting of the entirety of Birch House, Millennium Park, Naas Co. Kildare was completed.

On 29 July 2020 the Company paid an interim dividend for Q2 2020 of 1.25 cents per ordinary share.

24. Capital commitments

The group has no material capital commitments at the Condensed Statement of Financial Position date.

25. Contingent Liabilities

The Group has not identified any contingent liabilities which are required to be disclosed in the Condensed Consolidated Financial Statements.

Alternative performance measures

The Group has applied the European Securities and Markets Authority (ESMA) 'Guidelines on Alternative Performance Measures' in this Report and Condensed Consolidated Financial Statements. An alternative performance measure ("APM") is a measure of financial or future performance, position or cashflows of the Group which is not a measure defined by International Financial Reporting Standards ("IFRS").

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

GLOSSARY

BER: Building energy rating

CBD: The central business district of a city.

Contracted rent roll: The annualised cash rental income (including car park licence income) being received as at the stated date.

Debt to Equity gearing: The ratio calculated by dividing the amount of drawn loans by the Net Asset Value of the Group.

Dublin Catchment Area: The geographic area within an approximately thirty-minute commute of the M50 motorway.

EPRA: The European Public Real Estate Association.

EPRA EPS: is calculated by dividing EPRA Earnings for the reporting period attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period. EPRA Earnings measures the level of income arising from operational activities. It is intended to provide an indicator of the underlying income generated from leasing and management of the property portfolio and so excludes components not relevant to the underlying net income performance of the portfolio such as unrealised changes in valuation and any gains or losses on disposals of properties.

EPRA NAV: A measures of the fair value of net assets on an ongoing, long-term basis in accordance with guidelines issued by the EPRA while taking into account the dilutive effects of any outstanding options, convertibles, or other financial instruments. The EPRA NAV excludes the net mark-to market value of financial instruments used for hedging purposes where a company has the intention to keep the hedge position until the end of the contractual duration, and deferred tax in respect of any difference between the fair value and the book value of the investment properties.

ERV/Estimated Rental Value: A valuer's opinion as to the open market rental value of a property on a valuation date which could reasonably be expected to be the achievable rent for a new letting of that property on the valuation date. Colloquially referred to as market rent.

ESG: Environmental, social and governance.

Foreign Direct Investment companies ("FDI"): Overseas companies that have established operations in Ireland, often with the assistance of IDA Ireland.

Gross reversionary yield: The reversionary rent roll of a property or group of properties as a percentage of their fair value.

Gross yield at fair value: A calculation of the current expected cash rental return, being the contracted rent roll divided by the fair value of the investment property or properties.

Loan to Value/LTV: The LTV is calculated by dividing the amount of drawn loans by the fair value of the Company's investment properties.

Net Initial Yield ("NIY"): Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers' costs.

Net valuation gain: The fair value gain over the period (from the shorter of the time to the last valuation or purchase). Purchases made since the last valuation are initially recognised at price including transaction costs.

Next rent reversion date: The earliest following date at which the Company could be expected to choose to re-let a property at the property's ERV.

Property income: As defined in section 705A of the Taxes Consolidation Act, 1997. It means, in relation to a company or group, the Property Profits of the company or group, as the case may be, calculated using accounting principles, as: (a) reduced by the Property Net Gains of the company or group, as the case may be, where Property Net Gains arise, or (b) increased by the Property Net Losses of the company or group, as the case may be, where Property Net Losses arise.

Property Net Losses: As defined in section 705A of the Taxes Consolidation Act, 1997.

Property Net Gains: As defined in section 705A of the Taxes Consolidation Act, 1997.

Property Profits: As defined in section 705A of the Taxes Consolidation Act, 1997.

Property Rental Business: As defined in section 705A of the Taxes Consolidation Act, 1997.

QIAIF: A Qualifying Investor Alternative Investment Fund.

Rent review: A clause often included in property leases that provides for a periodic adjustment of the rent of a property to the market level of rent.

Reversion: A term used to describe the difference in rent from that which is currently due on outstanding leases and the ERV. Under-rented properties have contracted rents lower than ERV, over-rented properties have contracted rents higher than ERV.

Reversionary rent roll: The annualised cash rental income (net of car park licence income) that would be received if the property or properties were leased at ERV.

Seed portfolio: The portfolio of investment properties owned by the Yew Tree Investment Fund (in Members Voluntary Liquidation) when it was purchased on 8 June 2018.

SME: As defined by Enterprise Ireland, an enterprise that has between 50 employees and 249 employees and has either an annual turnover not exceeding €50m or an annual balance sheet total not exceeding €43m.

State Body: a body established by legislation in the Republic of Ireland which is either entirely or majority owned by the Irish Government

Total debt to equity gearing: The ratio of drawn debt to NAV of the Company.

Total expense ratio ("TER"): The ratio of the Company's annualised expenses, excluding transaction costs, financing costs and capital expenses and a percentage of the average net assets during that period.

Total shareholder return: The growth in share value over a period assuming all dividends are reinvested in shares of the Company when paid.

Vacancy: lettable space owned by the Company which is not let or licenced to a tenant.

WAULT: Weighted average unexpired lease term