Interim Results

INTERIM RESULTS

For the six month period to 30 September 2014

18 November 2014

Hibernia REIT plc ("Hibernia" or the "Company") today announces its interim results for the six months ended 30 September 2014

Highly active but disciplined period of investment

· €319m invested and €78m committed in Dublin property in the period, in 12 transactions

· Since IPO a total of €476m invested and committed, fully deploying IPO net proceeds

· 87% of acquisitions[1]completed off-market and 44% through loan purchases1

Excellent financial performance in short period of asset ownership: maiden dividend declared

· Basic and EPRA NAV per share of 104.7 cent, up 8.6% on March 2014, with net assets of €403m (March 2014: €371m)

· Increase in NAV driven by 9.6% valuation uplift on purchase price (7.1% including acquisition costs) in weighted average hold period of 3.9 months

· Net income of €31.9m, equating to basic and diluted EPS of 8.3 cent

· Maiden dividend of €2.0m declared on the enlarged share capital (DPS of 0.3 cent)

High quality Dublin property portfolio with rental reversion potential and development opportunities

· 81% in CBD offices, 11% in residential, 6% in CBD office development sites and 2% in logistics

· CBD office portfolio 99% occupied and has a current yield on cost of 5.5% (5.8% on contracted rents) off average rents of €34 psf, well below current prime rents of €40-45 psf

· Substantial development opportunities elsewhere in the portfolio, including office developments at Windmill Lane and 1-6 Sir John Rogerson's Quay

· Commenced fit-out of 213 partially completed apartments at Block 3, Wyckham Point: on target to deliver first units for rent by Q2 2015 and full completion by end of 2015

· Portfolio EPRA net initial yield 4.8%

Investment Manager Team expanded

· Core team in place with permanent headcount up to 13

· CFO recruited in June 2014

· Support where required from wider WK Nowlan team of 26 staff

Funding in place to take advantage of investment opportunities

· Secondary equity offering completed on 4 November 2014 raising gross proceeds of €300m

· €100 million three year revolving credit facility agreed with Bank of Ireland in August 2014

· Current cash and committed facilities of €330m and further incremental firepower of c.€360m if leveraging current equity base to 40% LTV[2]

Positive outlook for 2015

· Improving Irish economy (GDP growth in 2014 forecast to be 4.7%) and continuing foreign direct investment flows into Ireland supportive of sustained recovery in property market

· Management team seeing continued strong occupational demand driving rental growth and a substantial pipeline of investment opportunities

Danny Kitchen, Chairman of Hibernia REIT said:

"The six month period to 30 September has been very active for Hibernia, with €397m invested and committed in connection with 12 transactions, one of which completed after the period end. While the investment of the IPO proceeds has been rapid, the focus has been on investing wisely and it has been really encouraging to see the returns generated by the portfolio in a short hold period.

With €330m of cash and committed facilities in place and further debt capacity available, the Company is well positioned to take advantage of future investment opportunities."

Kevin Nowlan, Chief Executive Officer, WK Nowlan REIT Management Ltd, said:

"I am delighted with our progress and in particular with the portfolio we have assembled, which is already delivering attractive returns and is rich in potential. The successful completion of our €300m secondary equity offering earlier this month was a strong vote of confidence in our strategy and delivery to date. The capital raised positions us well to take advantage of the significant pipeline of acquisition opportunities we expect in the next 12 to 18 months."

Contacts:WK Nowlan REIT Management Limited +353 1 9058350Kevin NowlanTom Edwards-Moss

Murray Consultants +353 1 4980379Doug Keatinge

About Hibernia REIT plcHibernia REIT plc is an Irish Real Estate Investment Trust ("REIT") and is listed on the Irish and London Stock Exchanges. The principal activity of the Company is to acquire and hold investments in Irish property (primarily commercial property) with a view to maximising shareholder returns.

DisclaimerThis 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 Company 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 Company 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. 

Directors and Other Information

Directors Daniel Kitchen (Chairman)

Colm Barrington (Senior Independent Director)

Stewart Harrington

William Nowlan

Terence O'Rourke

Secretary Castlewood Corporate Services Limited

(Trading as Chartered Corporate Services)

Taney Hall

Eglinton Terrace

Dundrum

Dublin 14

Ireland

Registered Office Marine House

Clanwilliam Place

Dublin 2

Ireland

Company Number 531267

Independent Auditor Deloitte & Touche

Chartered Accountants and Statutory Audit Firm

Hardwicke House

Hatch Street

Dublin 2

Ireland

Investment Manager WK Nowlan REIT Management Limited

Marine House

Clanwilliam Place

Dublin 2

Ireland

Independent Valuer CBRE Dublin3rd Floor, Connaught House1 Burlington RoadDublin 4

Ireland

Bankers Bank of Ireland

50-55 Baggot Street Lower

Dublin 2

Ireland

Depository Credit Suisse International, Dublin Branch

Kilmore House

Park Lane

Spencer Dock

Dublin 1

Ireland

Registrar Capita Registrars (Ireland) Limited t/a Capita Asset Services

2 Grand Canal Square

Dublin 2

Ireland

Corporate Legal Advisers A&L Goodbody

25/28 North Wall Quay

IFSC

Dublin 1

Ireland

Corporate Brokers Goodbody

Ballsbridge Park

Ballsbridge

Dublin 4

Ireland

Credit Suisse Securities (Europe) Limited

One Cabot Square

London E14 4QJ

United Kingdom

Chairman's Statement

The six month period to 30 September 2014 has been a highly active one for Hibernia: €319m was invested and €78m was committed across 12 acquisitions in Dublin, one of which was contracted in the period and subsequently completed in early November. This takes the total invested and committed since the Company's inception to €476m in 13 transactions and represents the full deployment of the net proceeds raised in the IPO in December 2013 of €372m.

In August a €100m three year revolving credit facility was agreed with Bank of Ireland Corporate Banking. This is secured by a floating charge over the Company's assets. Significant work was also carried out in the period in preparing for a second equity issue, which was launched in October and successfully completed in early November, raising net proceeds of c.€287m. The funds from this will be used both for investment in the existing property portfolio and to fund future acquisitions. Following the completion of the equity issue, the Company has cash and committed facilities of €330m and further potential incremental funds of c.€360m if it was to gear up to 40% loan to value, the maximum leverage it can incur under its investment policy.The Board is very pleased with the progress and performance of the Company to date. In particular it has been satisfying to see the financial discipline that the Investment Manager has maintained throughout a period of highly active investment markets and also, with 87% of the acquisitions to date undertaken via off-market transactions, its ability to find and secure acquisition opportunities away from competitive auction processes.Financial results and position

As at 30 September 2014, the Company's NAV (and EPRA NAV) was 104.7 cent per share, an increase of 8.6% over the Basic and EPRA NAV per share as at 31 March 2014. This increase was driven principally by an uplift in the value of the Company's property portfolio since acquisition of 9.6% excluding acquisition costs (7.1% including acquisition costs). The weighted average hold period (by purchase price) of the acquisitions the Company has made from the date of entering contracts to 30 September 2014 (for its investment properties) is 3.9 months.

The Company is managed by WK Nowlan REIT Management Limited ("The Investment Manager"). Information on the transactions with this and other related parties is set out in Note 18 to the condensed consolidated financial statements. There have been no changes in the related parties' transactions described in the last annual report during the six months to 30 September 2014 that could materially affect the financial position or performance of the Group.

DividendThe Board has declared a maiden dividend of 0.3 cent per share or €2.0m. This dividend will be paid on the enlarged equity base on 28 January 2015 to shareholders on the register as at 9 January 2015.OutlookThe Board believes the improving domestic economy and continuing foreign direct investment flows into Ireland are supportive of sustained recovery in the property market. With a significant volume of transactions expected in the Irish property market, driven in particular by deleveraging by banks and other institutions, the Board expects continued success in deploying the Company's capital in building the property portfolio.

Daniel Kitchen

Chairman

18 November 2014

Investment Manager's Review

The period from 1 April to 30 September 2014 has been an extremely active one for WK Nowlan REIT Management Ltd, the Investment Manager. We have found and assessed a high number of investment opportunities for the Company and moved to bring the most attractive of these opportunities, which matched the Company's investment policy, into the Company's ownership. We have, where possible, avoided competitive auction processes as we believe in most cases the ultimate prices paid would not deliver attractive returns for the Company's shareholders: since inception, 87% of the acquisitions (by purchase price) we have entered into have been undertaken through off-market transactions. We have also pursued the acquisition of loans secured by property collateral as we have seen less competition in this space: to date 44% of our acquisitions (by purchase price) have been by way of secured loan acquisitions.

The portfolio

Our investment activity has resulted in a property portfolio as at 30 September 2014 of 15 investment properties valued at €438m. This comprised:

• Eight investment properties held directly by the Company;

• Six investment properties which were collateral secured by loans held by the Company of which the Company intends to take direct ownership. Two such properties, Hardwicke House and Montague House, are the subject of a call option agreement whereby the Company has an option to purchase the properties directly. There is also a put option agreement in place whereby the vendor has the right to sell the buildings to the Company if the Company does not exercise its right under the call option agreement; and

• One investment property, the Forum Building, which was subject to a signed contract pursuant to which the Company would take direct ownership at completion of the transaction.

Since 30 September 2014, the purchase of the Forum Building has completed and one investment property (Block 3, Wyckham Point), which was held as collateral secured by a loan as at 30 September 2014 has been conveyed into the direct ownership of the Company. This has resulted in 10 of the 15 assets classified as investment properties now being directly held by the Company.

In addition, as at 30 September 2014, the Company held secured loans to the value of €67m, secured over property collateral which do not form part of the Company's property portfolio and are not accounted for as investment properties.

By sector the property portfolio as at 30 September 2014 comprises:

The CBD office element of our portfolio has the following statistics:

· WAULT to earlier of expiry or break: 4.4 years

· WAULT to expiry: 9.2 years

· Average contracted rent per square foot: €34

· Weighted average period to rent review: c. 2 years

· Weighted average capital cost per square foot at acquisition: €590

· Occupancy level: over 99%

Developments and refurbishmentsDuring the period JJ Rhatigan & Company, one of the leading building contractors in Ireland, was selected to undertake the fit out and completion of the 213 partially completed apartments in Block 3, Wyckham Point in Dundrum and work commenced on site. This asset was acquired as part of the Dorville loan portfolio in March 2014 for €28m (including costs). It is estimated that the total cost to complete the apartments will be up to €25m (including VAT) and as at 30 September 2014, €1.5m had been spent. It is expected that the first apartments will be available to let by mid-2015 and that the project will be fully completed by the end of 2015.The Company acquired the Windmill Lane site in Dublin 2 in June 2014 in an off-market transaction for a consideration of €7.5m (€7.7m including costs). The site is vacant and adjoins the Company's Hanover Building. The site has existing mixed use planning permission for 124,838 sq. ft. Net Internal Area of office space, 9,547 sq. ft. of retail space, 15 residential units (18,062 sq. ft.) and 58 parking spaces.

In September, the Company completed the acquisition of a 0.74 acre site at 1-6 Sir John Rogerson's Quay in an off-market transaction for a consideration of €17.8m (€18.3m including costs). The site fronts onto the River Liffey and adjoins the Observatory Building. It is directly in front of the Windmill Lane site and together with this, the Hanover Building and the Observatory Building forms a riverside quadrant wholly owned by Hibernia. The site has existing mixed use planning permission for 102,021 sq. ft. Net Internal Area of office space, 5,360 sq. ft. of retail space, three residential units of 5,602 sq. ft. and 34 parking spaces.

It is estimated the aggregate capital expenditure required to complete the development of both the Windmill Lane and 1-6 Sir John Rogerson's Quay sites would be circa €85m.

Asset management

The investment manager successfully brought on board the management of all the investment properties acquired in the period and is proactively managing these assets.

As expected, Commerz Management Services Ltd served notice to break its lease (on c. 55,000 sq. ft. of the c. 71.000 sq. ft.) in Commerzbank House in January 2015. This break option is subject to a one year rental penalty of €2.4m. We are in advanced discussions with Commerz Management Services Ltd regarding the early surrender of their demise. A key asset management initiative over the coming months will be to refurbish Commerzbank House to improve the offering to potential tenants.

Market updateOccupational demand for Dublin offices remains strong with c.1.3m sq. ft. of take up in the nine months to the end of Q3 2014. The total take up figure for 2014 is expected to be c. 1.9m sq. ft. which is in excess of the 20 year average of 1.8m sq. ft. There is an occupier bias towards the CBD (62% of take up in 9 months to Q3 2014) vs. the suburbs (38%), although some potential occupiers are broadening their searches to the suburbs due to the lack of Grade A options for tenants in the CBD. As at 30 September there was only one Grade A building larger than 50,000 sq. ft. available in the CBD but it is understood that Facebook have now exercised an option to lease this building (No. 5 Grand Canal).

Regarding market rents, there have been a small number of transactions at c. €45 per sq. ft. in the CBD with quoted rents for the limited remaining prime stock at c. €50 per sq. ft. Rent free periods have reduced to c. 6 months for a 10 year commitment.

Two office buildings are currently under construction in the CBD which will total c. 190,000 sq. ft. net but the majority of this space is already pre-let. There is one building under construction in Dublin 4 which will provide c. 170,000 sq. ft. of office accommodation.

On the investment side, prime yields are c. 5% with capital values currently c. 34% above trough levels but c. 56% below peak levels. Demand for product remains strong with total investment volumes for 2014 expected to hit €4bn for direct sales (€2.9bn in 2014 year to date) and €1bn for loan sales (€700m in 2014 year to date), excluding IBRC loan sales.

In the residential market (nationwide) prices are still c. 42% lower than peak levels but since the trough house prices have risen by c. 16%. In the past twelve months prices are up c. 13%. The strongest value increases are being seen in Dublin where values are up a third since the trough in August 2012, increasing 23% year-on-year. The Dublin residential rental market continues to perform well with rental values up c. 15% year-on-year.

 FinancingIn August, the investment manager agreed with Bank of Ireland Corporate Banking the terms of a €100m three year revolving credit facility secured via a floating charge over the Company's assets. As at 30 September, the Company had drawn €25m from this facility representing a loan to value ratio of 6%.In the period, extensive preparatory work began for a second equity issue to raise additional funds to invest within the Company's existing portfolio and for further acquisitions. The equity issue was announced in October and completed in November 2014, raising net proceeds of c.€287m. Following the completion of the equity issue, the Company has current cash and committed facilities of €330m and further potential incremental funds of c.€360m if the current equity base was to be leveraged to 40% loan to value, the maximum leverage the Company can incur under its investment policy.

Team

The investment management team expanded to 13 full time employees following the hiring of Tom Edwards-Moss as CFO in June. While there may be some incremental hires as the portfolio grows, we believe we have in place an exceptional core team with the broad range of experience necessary to deliver for the shareholders of the Company. We continue to benefit from the ongoing support, when necessary, of WK Nowlan Property's team of 26 property professionals on an arms-length basis.

Looking ahead

Occupational demand continues to be strong, particularly in the CBD office market. We are expecting a significant volume of transactions in the market in the next 12-24 months and are tracking a number of assets. These facts, together with the attractive portfolio we have already assembled make us optimistic for the future.

Kevin Nowlan

Chief Executive, WK Nowlan REIT Management Limited

18 November 2014

Principal Risks and Uncertainties

There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Directors do not consider that the principal risks and uncertainties have changed since the publication of the Report and Consolidated Financial Statements for the period from 13 August 2013 to 31 March 2014 (the "Annual Report"). A detailed explanation of the risks summarised below, and how the Group seeks to mitigate these risks, can be found on pages 20 to 22 of this report which is available at http://www.hiberniareit.com.

· The Group is externally managed and is significantly dependent on the performance of the Investment Manager. There is no assurance that the Investment Manager will be successful in achieving the Group's objectives.

· The Group's property interests, direct and indirect, are concentrated in Irish commercial property located mainly in Dublin. In addition, the close proximity to each other of some of the existing investment properties may exacerbate the effects of fire, flood or other catastrophes.

· A worsening of Global and Irish economic conditions and the volatility of international markets could impact on the Group. The precise impacts of such events are difficult to predict but could include, inter alia, reduced rental rates, occupancy decline, lower valuations, difficulties in selling properties at acceptable values or at all, lack of available credit, and over or under supply of available commercial property investments in particular from NAMA which is anticipated to be a major supply source.

· The Group faces competition from other property investors for the purchase of suitable properties and in seeking creditworthy tenants for acquired properties. This may mean that the Group is not able to invest all of the proceeds of the recent Capital Raise within the anticipated timeframe.

· The Group faces risks inherent in the acquisition of investment property, both by direct purchases and via loan acquisitions.

o For both direct purchases and loan acquisitions there are risks that due diligence may not identify all the risks and liabilities in respect of acquisitions and that due diligence may be limited in cases of multiple asset purchases or indirect purchases via loan acquisitions.

o Acquiring properties indirectly, e.g. via loan purchases where the target property is collateral security to the purchased loans, carries additional risks such as the possibility of legal or other impediments to the ultimate transfer of the property collateral to the Group or the requirement to enforce security if the loan provided by the acquirer is not repaid. Delays in the process can also occur due to debtor challenge or insolvency which could impact on covenants under the Group's Revolving Credit Facility which require that steps be taken to transfer the property collateral to the Group within nine months from the date of acquisition of the relevant loan. Agreements between the Group and the borrower facilitating the transfer of the property may be breached and require the Group to undertake a legal process of enforcement.

· The valuation of properties is inherently subjective and based on assumptions which may not be accurate or be outside of the Group's control. Considerable judgement is required, not only by the Group's external valuers, but also by the Directors in assessing the results of valuation exercises and the conditions and impacts of refurbishment or development activities.

· The Directors do not believe that the Company needs to be authorised by the Central Bank as a retail investor or qualifying investor AIF. If this is found not to be the case, the Company could fall within the scope of Irish collective investment scheme legislation and thereby be materially restricted in its ability to achieve its investment objectives and returns to Shareholders. If such authorisation was required and refused, liquidation of the Company would probably ensue.

· The Investment Manager has obtained authorisation from the Central Bank as an AIFM under the AIFMD regulations. Changes to this regime or new recommendations and guidance may impose changes to the operating procedures of the Investment Manager and potentially impose restrictions on the investment activities of the Investment Manager and in turn the Group.

· The Company obtained Irish REIT status but there is no guarantee that the Company will be able to retain this and if it is withdrawn the Company faces taxation charges on its property rental business and chargeable gains on disposals of property forming part of this business. 

Statement of Directors' Responsibilities

Each of the Directors, whose names and functions appear on pages 24 to 25 of the Annual Report, confirm to the best of their knowledge that the interim condensed consolidated financial statements in the half year report have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the European Union ("EU") and interim management report[3] herein contains a

fair review of the information required by Disclosure and Transparency Rules of the Central Bank of Ireland, namely:

- Regulation 8(2) of the Transparency Directive (Directive 2004/109/EC) Regulations 2007, being an indication of important events that have occurred during the period from 1 April 2014 to 30 September 2014 and their impact on the half yearly financial report, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

- Regulation 8(3) of the Transparency Directive (Directive 2004/109/EC) Regulations 2007, being related party transactions that have taken place during the period from 1 April 2014 to 30 September 2014 and that have materially affected the financial position or performance during the period.

Signed on behalf of the Board

Daniel Kitchen Terence O'Rourke

Chairman Director

INDEPENDENT REVIEW REPORT TO HIBERNIA REIT PLC

We have been engaged by the Company to review the condensed consolidated set of financial statements in the Half Yearly Financial Report for the six months ended 30 September 2014 which comprise the Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Statement of Financial Position, Condensed Consolidated Statement of Cash Flows, Condensed Consolidated Statement of Changes in Equity and related notes 1 to 20. We have read the other information contained in the Half Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated set of financial statements.

This report is made solely to the Company, in accordance with International Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The Half Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half Yearly Financial Report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 (as amended) and the Transparency Rules of the Central Bank of Ireland.

As disclosed in note 3a, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed consolidated set of financial statements included in this Half Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed consolidated set of financial statements in the Half Yearly Financial Report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in Ireland. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated set of financial statements in the Half Yearly Financial Report for the six months ended 30 September 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 (IAS 34 - Interim Financial Reporting) as adopted by the European Union, the Transparency (Directive 2004/109/ EC) Regulations 2007 (as amended), and the Transparency Rules of the Central Bank of Ireland.

Deloitte & Touche

Chartered Accountants and Statutory Audit Firm

Dublin

18 November 2014

Condensed Consolidated Statement of Comprehensive Income

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flows

Notes Forming Part of the Half Yearly Financial Report

The Company together with its subsidiaries, Hibernia REIT Finance Limited, Lamourette Limited and Mayor House Basement Management Limited (together the "Group") is engaged in property investment (primarily commercial) in the Irish market with a view to maximising its Shareholders' returns. Hibernia REIT plc elected for Real Estate Investment Trust ("REIT") status on 11 December 2013 under section 705 E of the Finance Act 2013.

The Company is a public limited company and is incorporated and domiciled in Ireland. The address of the Company's registered office is Marine House, Clanwilliam Place, Dublin 2. The Company was incorporated on 13 August 2013 and re‑registered as a public limited company on 8 November 2013. The registered number of the Company is 531267.

The Company's ordinary shares were listed on the main market for listed securities on the Irish and London Stock Exchanges on 11 December 2013.

The Half Yearly Financial Report has been prepared on a going concern basis. The Directors have performed an assessment of going concern and are satisfied that the Group is appropriately capitalised. The Group is generating positive cash‑flows and, as discussed in Note 14, have in place a revolving credit facility with an undrawn balance of €75m at 30 September 2014. In addition the Group has successfully raised approximately €287m in a Capital Raise completed on 4 November 2014. The Group has assessed its liquidity position and 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.

The annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union ("EU"). This half yearly financial report has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the EU.

The Company has not early adopted any forthcoming IASB standards.

The Half Yearly Financial Report is presented in euro, which is the Company's functional currency and the Group's presentation currency.

The half yearly financial report incorporates the financial information of the Company and its subsidiaries, Hibernia REIT Finance Limited, Lamourette Limited and Mayor House Basement Management Limited. The Company controls its subsidiaries by virtue of its 100% shareholding in those companies.

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.

The preparation of financial information requires the use of certain critical accounting estimates. It also requires the Group to exercise judgment in applying the Group's accounting policies. Although these estimates are based on the Board's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. The following are the significant judgements and key estimates which were made in respect of this financial information.

Recognition and classification of investment transactions

The Group has acquired an interest in investment property assets both as direct asset purchases and through the acquisition of loans which are secured over the target property. In some cases the Group may acquire portfolios of loans where it does not intend to ultimately directly acquire all the underlying property assets.

Investment properties are treated as acquired when the Group assumes the significant risks and rewards of ownership. In order to make this judgement, the Board reviews each deal individually.

Recognition of property assets collateralising acquired loans as investment properties requires significant judgement by the Directors to determine if it is probable that the future economic benefits that are associated with the underlying investment property will flow to the Group.

Dorville Loan Portfolio

The Dorville loan portfolio is a loan portfolio, with a par value (at the time of acquisition) of €151.3m, which was acquired by the Group in March 2014 for €67m (€68.4m including costs). The Board completed an extensive exercise in reviewing the collateral attached to this portfolio, consisting of 16 asset groups, in May 2014 and as a result determined that it would seek the direct ownership of three of the property assets, namely Block 3 Wyckham Point, the Dorville Cannon Place Apartments and South Dock House (the "Dorville Core Assets"). The Dorville Core Assets are recognised as investment properties during the period in accordance with the Group's accounting policy on investment properties.

Additionally, the Dorville loan portfolio is secured against 13 other asset groups, namely over 70 apartments, 3 houses, 12 commercial units and 26.5 acres of land, primarily in Dublin. These 13 asset groups are referred to as the Dorville Non‑Core Assets. The Group has determined that the Dorville Non‑Core Assets are not suitable for the Group's portfolio of investment properties and not to pursue the transfer of direct ownership of these properties to it or to retain them within the Group's portfolio of investment properties and they will therefore be disposed of to third parties in order to recover monies due under the loan facilities. The disposal process of the Dorville Non‑Core Assets has already commenced and is expected to be completed by December 2015.

In the judgement of the Directors, the acquisition of the three Dorville Core Assets is so far advanced as to render it virtually certain that the title of these properties will be transferred to the Group in the near term and that they fulfil the criteria for recognition as investment properties under the Group's accounting policy on investment properties (Note 4.(b)). The Directors also consider that the recognition of these properties presents the most relevant and useful information for users of this financial information. It ensures that users of this financial information can properly assess the portfolio structure and potential.

As a result, the acquisitions of the Dorville Core Assets were recognised as investment properties during the period.

Valuation of investment properties

The Group's investment properties are held at fair value and were revalued at 30 September 2014 by the external valuer, CBRE Limited, a firm employing qualified valuers in accordance with the Royal Institution of Chartered Surveyors Valuation - Standards (January 2014) (the "Red book") and IFRS 13 Fair Value Measurement. Further information on the valuation is given in Note 10.

The Board and Investment Manager conduct a detailed review of each property valuation to ensure that appropriate assumptions have been applied. Property valuations are complex and involve data which is not publically available and a degree of judgement. The valuation is based upon the key assumptions of estimated rental values and market based yields. With regard to redevelopments and refurbishment, the development considered achievable, assumed timescale, the assumed future development cost and an appropriate finance and/or discount rate are also used to determine the property value together with market evidence and recent comparable properties where appropriate. In determining fair value the valuers make reference to market evidence and recent transaction prices for similar properties.

The Directors must ensure that they are satisfied that the valuation of the Group's properties is appropriate for inclusion in the accounts without adjustment. No such adjustment was required for the period ending 30 September 2014 or on 31 March 2014.

Impairment of loans and receivables

The Directors are required to exercise judgement in making assumptions and estimations when calculating loan impairment provisions. The method used for the Group's loans involves an assessment of the value of the underlying collateral, which assessment involves significant judgement. The Directors have determined that no impairment is required as they expect that the loans will be resolved at least at their carrying value due to the value of the collateral on which they are secured. Further information on these loans is given in Note 11.

There were no other items of significant judgement or key estimates that might have a material impact on the Half Yearly Financial Report at 30 September 2014.

In addition to the significant accounting policies set out in Note 3 of the Annual Report, the following accounting policies have been adopted or amended in preparing the half yearly report.

a) Revenue recognition

Revenue consists of rental income on investment properties and interest income on loans and receivables. Revenue is measured at the fair value of the consideration received or receivable.

Revenue is recognised in the Condensed Consolidated Statement of Comprehensive Income when it meets the following criteria:

• It is probable that any future economic benefit associated with the item of revenue will flow to the Group and

• The amount of revenue can be measured with reliability.

Rental Income

Rental income arises on properties which are included in investment property in the Condensed Consolidated Statement of Financial Position and which are leased out under operating leases. Rental income from operating leases is recognised in the Condensed Consolidated Statement of Comprehensive Income on an accrual basis as revenue on a straight line basis over the lease term. Rent received in advance is deferred in the Condensed Consolidated Statement of Financial position and recognised in the period to which it relates to.

When the Group provides incentives to its lease customers the incentives are recognised over the lease term on a straight line basis. These incentives can be a rent free period at the commencement of the lease, a reduced rent for a period, an assumption of lessee costs or other incentives negotiated. All such incentives are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive's nature or form. The aggregate cost of such incentives is recognised as a reduction of rental income on a straight-line basis over the lease term or over the period to the next break point. Where adjustments to rent or a review under a lease is unsettled at the reporting date, these are included in income based on a reasonable estimate of the expected settlement amount and then adjusted to the actual amount when settlement is reached. Surrender payments for early lease terminations are reflected, net of any costs such as dilapidation or legal costs relating to the lease, in the accounting period in which the surrender took place.

Service charges and other sums receivable from tenants are recognised on an accrual basis by reference to the stage of completion of the relevant service or transactions at the reporting date. These services generally relate to a 12‑month period.

Details on all aspects of rental payments and concessions under leases are provided to the external valuers at each reporting date for their consideration in assessing the fair value of the properties concerned.

b) Investment properties

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. Subsequent to 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 Condensed Consolidated Statement of Comprehensive Income in the period in which they arise.

Inputs used to measure fair value are categorised into different levels of the fair value hierarchy, the fair value measurement is categorised in its entirety in the level of the lowest level input that is significant to the entire measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

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 Note 3(d).

The valuations of investment properties and investment properties under development are prepared, as recommended by the Society of Chartered Surveyors, in accordance with the RICS-Valuation-Professional Standards (January 2014) (the Red Book) and IFRS 13 Fair Value Measurement.

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 Condensed Consolidated Statement of Comprehensive Income. Interest and other outgoings, less any income, on properties under development are capitalised. Interest capitalised is calculated on development outgoings using the weighted average cost of general Group borrowings. Fair value for investment properties under development is based on the Group's external professional valuer's assessment of future value, with an appropriate adjustment for the costs of completion and remaining risk, based on market conditions at the reporting date.

An investment property is de‑recognised on disposal, i.e. when the significant risks and rewards 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 Condensed Consolidated Statement of Comprehensive Income in the period in which the property is de‑recognised.

The Group is organised into five business segments, against which the Group reports its segmental information, being Office Assets, Industrial Assets, Residential Assets, Development Assets and Other Assets (loans and investment properties that do not fall into the preceding classifications). All of the Group's operations are in the Republic of Ireland. Operating segments are reported in a manner consistent with the reporting to the Board of Directors of the Company which is the chief operating decision maker of the Group.

Unallocated income and expenses are those that occur centrally, e.g. investment management fees and other administration expenses. Unallocated assets include cash and cash equivalents, tax refundable and administration expenses paid in advance. In addition, cash received in advance in relation to rental receipts on properties and rental income accrued have been allocated from receivables and cash and cash equivalents to the appropriate segment.

The Group's key measure of underlying performance of a segment is total income after revaluation gains and losses which comprises revenue (rental and interest 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, which measure the cash passing rent returns on market value of investment properties before and after and adjustment for the expiration of rent free period or other lease incentives respectively. All interest income relates to Other Assets whilst the revenue for all other segments represents rental income.

No segment information is presented for the prior period as the Group's investment properties were all acquired since 31 March 2014.

Group Consolidated Segment Analysis

For the period 1 April 2014 to 30 September 2014 (unaudited)

Rental income arises from the Group's investment properties.

Interest income arises from the recognition of the effective interest rate on the loans and receivables in accordance with the accounting policy described in Note 4(a).

The gains on de-recognition of loans arise from the difference between initial recognition at cost of the loans relating to the Dorville Core Assets and the fair value at the date of subsequent recognition of the underlying investment properties.

Hibernia REIT plc elected for Real Estate Investment Trust ("REIT") status on 11 December 2013 under Section 705 E of the Finance Act 2013. As a result, the Group does not pay Irish corporation tax on the profits and gains from 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.

An Irish REIT is required to distribute to its shareholders (by way of dividend), on or before the filing date for the Irish REIT's tax return for the accounting period in question, at least 85% of the Property Income of the Property Rental Business arising in each accounting period (provided it has sufficient distributable reserves). Failure to meet this requirement will result in the Irish REIT incurring a tax charge calculated by reference to the extent of the shortfall in the dividend paid. A dividend paid by an Irish REIT or the principal company of a Group REIT, as the case may be, from its Property Rental Business is referred to as a Property Income Distribution (PID). Any other dividend paid by the Irish REIT is referred to as a Non PID dividend.

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

There are no convertible instruments, options, warrants or ordinary shares that are issued upon the satisfaction of specified conditions as at the period end 30 September 2014. As a result, there are no dilutive effects on earnings per share and the basic and diluted earnings per share are identical.

No dividends have been paid in the period since incorporation.

The European Public Real Estate Association (EPRA) best practice recommendations recommend the presentation of earnings per share based on EPRA earnings which are defined as the profit after taxation excluding investment property revaluations and gains/losses on disposals, intangible asset movements and their related taxation. EPRA earnings are a measure of the degree as to which the Group's earnings are supported by core activities.

The calculations are as follows:

Basic and diluted earnings per share

For the period 13 August 2013 to 31 March 2014 the calculation of earnings per share is based on the period from commencement to trade, 11 December 2013, to 31 March 2014 rather than the period from incorporation, 13 August 2013, to 31 March 2014 as the Directors believe that this calculation provides a more informative disclosure to the shareholders because:

• The date of commencement to trade is the same as the listing date, and

• The majority of shares were issued around this date.

EPRA earnings per share

During the period, certain loans which were acquired by the Group were recognised as investment property and accounted for in accordance with the accounting policies set out in Note 4(b).

On 28 August 2014, the Group announced that it had signed a development contract with JJ Rhatigan & Company for the fit‑out and completion of the Group's 213 partially completed apartments in Wyckham Point, Dundrum. The total cost to complete the apartments is expected to be up to €25m (including VAT). Approximately €1m in costs in relation to this development have been incurred to date.

Some of the inputs to the valuations are defined as "unobservable" by IFRS 13. As discussed in Note 3(d) above, property valuations are inherently subjective as they are made on the basis of assumptions made by the valuer. For these reasons, and consistent with EPRA's guidance, the Group has classified the valuations of its property portfolio as Level 3 as defined by IFRS 13. The methods that are 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. There were no transfers between levels during the period. There was no capitalised interest included in investment properties during the period.

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 VPS4 of the Red Book 2014, 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. Included in the inputs for the valuations above are future development costs where applicable. The tables below show a summary of the quantitative inputs for the fair value determination as at 30 September 2014 sensitivity information for each category.

Quantitative Information

The following information has been used in calculating the fair value of Investment Properties at 30 September 2014. There is no equivalent disclosure for the period ended 31 March 2014 as the Group had no Investment Properties as at that date.

Information on fair value inputs as at 30 September 2014 (unaudited)

Sensitivity Analysis

A decrease in the estimated annual rent will decrease the fair value. Similarly, an increase in the yield will decrease the fair value. The equivalent yield measures the yield assuming rent reverts to market levels when leases break or end. It is sometimes described as the weighted average yield as it incorporates elements of both initial and reversionary yields. It therefore incorporates elements of current and estimated rental values and is sensitive to market conditions.

Across the entire portfolio of investment properties, a 1% increase in yield would have the impact of a €85m reduction in fair value whilst a 1% decrease in yield would result in a fair value increase of €125m.

This is further analysed by property class, as follows:

The opening loans and receivables balance consists of the loans which are part of the Dorville loan portfolio acquired in March 2014, which were secured on the Dorville Core and Non‑Core Assets as discussed in Note 3(d). Loan purchases and advances for the period consist of a loan issued to the owners of Cumberland House as well as a small portfolio acquired from Ulster Bank, the BH portfolio. The Group advanced €38m by way of a six month loan secured on Cumberland House in the course of negotiations to acquire the property. The Group's period of exclusivity has now ended but it remains interested in acquiring a direct holding in the property.

The Directors do not consider impairment allowances are required against these loans as they expect that the loans will be resolved at least at their carrying value due to the value of the collateral on which they are secured.

The loans secured on the Dorville Non‑Core Assets were acquired at a substantial discount to their nominal value reflecting their distressed state at the time of acquisition. All of the loans are either past due or are repayable on demand. None of the loans are expected to be repaid by recourse to the original borrower, although income from the underlying collateral assets is being generated. The majority of loans were the subject of a receivership when acquired and do not pay interest. As a result of these factors, no disclosures are made in relation to maturity or age analysis or interest rate risk.

The Directors have determined that the carrying value of the loans and receivables at 30 September 2014 and at 31 March 2014 approximates their fair value based on their assessment of the value of the underlying collateral as well as expectations in relation to income and expenditure on these positions. Collateral value is assessed by reviewing expected sales values and results of sales to date together with the agent appointed to manage the process.

The balance relating to share issuance costs payable deferred, €2.4m (31 March 2014 €0) relates to unavoidable costs incurred in relation to the capital raise which was underway at the 30 September 2014. Further information is given on this in Note 13. These costs will be deductible from the share premium on capital raised and are therefore deferred in the half yearly financial report.

The Directors have determined that the carrying values of trade and other receivables approximate their fair value due to their short-term maturity.

On 7 October 2014 the Company announced its intention to undertake a Firm Placing and Placing and Open Offer (the "Capital Raise") to raise gross proceeds of approximately €300 million through the issue of 285,317,459 New Ordinary Shares at a price of 105 euro cent (or €1.05) per New Ordinary Share (the "Issue Price"). 71,428,571 New Ordinary Shares are proposed to be issued through the Firm Placing at the Issue Price to raise gross proceeds of approximately €75m and 213,888,888 New Ordinary Shares are proposed be issued through the Placing and Open Offer at the Issue Price to raise gross proceeds of approximately €225m. The costs of the capital raise are expected to be approximately €13m.

On 12 August 2014, the Company and Hibernia REIT Finance Limited signed a €100m three‑year floating rate revolving credit facility with Bank of Ireland of which €25m has been drawn down as of 30 September 2014. An arrangement fee of €500,000 was paid in relation to this facility and is accounted for as part of the effective interest on the loan. A commitment fee of 1% is payable on the undrawn balances.

First‑ranking security for the Revolving Credit Facility is given by way of floating charges granted by the Company and its subsidiary, Hibernia REIT Finance Limited, over all of the Group's assets and also by way of a fixed charge granted by the Company over the shares in each of its subsidiaries as may from time to time exist.

The Directors have determined that the carrying values of loans and advances from banks approximate their fair value due to their short-term maturity.

The amount due re investment property relates to the balance due in relation to the acquisition of the Forum Building, €34.9m.

For further information on the amount relating to share issuance costs payable please refer to Notes 12 and 13.

The Directors have determined that the carrying values of trade and other receivables approximates their fair value due to their short-term maturity.

On 16 May 2014 the Group entered into an arrangement to acquire two Grade A office buildings, Hardwicke House and Montague House in Dublin's Central Business District in a partially deferred transaction for a total consideration of approximately €61.3m (including costs). This transaction was structured as a loan transaction with the Group paying a sum of €18.25m. Under the terms of a call option and put option agreement, the Group has the right to take ownership (or can be required to take ownership) of the buildings on payment of the agreed balance and the vendor has the right to sell the property to the Group after 1 January 2016 if the Group has not already acquired it. The Company is most likely to complete the acquisition in December 2015 to comply with existing REIT rules.

The payable due for investment property is carried at the present value of future cash-flows. The Directors have determined that this carrying approximates its fair value.