Yew Grove REIT robust performance of rent roll and stability of portfolio valuation

Yew Grove REIT plc (LON:YEW) has reported its unaudited condensed consolidated results for the six month period ended 30 June 2020.

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.”

Chief Executive Officer’s Statement

I am delighted to introduce the interim report and unaudited condensed consolidated financial statements of Yew Grove REIT plc 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:

 BuildingTypeLocationValue (€’000)*Contracted Rent Roll (€’000)Gross Yield at Fair ValueReversionary Rent Roll  (€’000)Gross Reversionary YieldWAULT to lease break (years)WAULT to lease end (years)Portfolio vacancy
1One GatewayOfficeDublin19,0301,3066.9%1,4957.9%2.03.10%
2LetterkennyOfficeNorth West15,6701,4379.2%1,4589.3%7.77.70%
3Three GatewayOfficeDublin14,4909136.3%1,1818.2%1.51.50%
4TeleflexOfficeMidlands11,5809488.2%8517.3%8.211.20%
5IDA Athlone Block BIndustrialMidlands6,0755308.7%5308.7%2.612.60%
6Unit 2600, Cork AirportOfficeCork6,20000.0%63310.2%0.00.0100%
7Ashtown Gate Block COfficeDublin5,0803917.7%4017.9%3.75.40%
8IDA Athlone Unit B2IndustrialMidlands5,0504839.6%4839.6%3.214.20%
9Ashtown Gate Block BOfficeDublin4,8904058.3%3807.8%2.68.90%
10IDA Waterford Block AOfficeSouth East4,1003538.6%42410.3%3.114.50%
11IDA Athlone Block AIndustrialMidlands3,5902707.5%3138.7%5.38.50%
12IDA Athlone Block CIndustrialMidlands3,1402808.9%2538.0%4.29.20%
13Blackwater HouseOfficeCork2,7502358.5%31711.5%4.94.929%
14Airways Unit 7IndustrialDublin2,7001605.9%2589.6%5.010.00%
15Airways Unit 8IndustrialDublin3,0001605.3%2919.7%5.510.50%
16Bridge CentreRetailMidlands1,73025414.7%18110.5%1.82.30%
17Holly AvenueIndustrialDublin1,35000.0%15311.3%0.00.0100%
18Unit L2 ToughersIndustrialDublin Catchment1,8551709.2%21111.4%2.62.60%
19Old Mill LaneMixed UseSouth West1,69024714.6%1549.1%6.28.50%
20Canal HouseMixed UseMidlands92010711.6%606.5%6.56.50%
21Centre PointIndustrialDublin85511012.9%516.0%6.16.10%
22Ash Hse, Millennium ParkOfficeDublin Catchment3,20032610.2%33110.4%1.06.00%
23Beech Hse, Millennium ParkOfficeDublin Catchment2,17022210.2%22110.2%4.07.20%
24Birch Hse, Millennium ParkOfficeDublin Catchment7,00069710.0%69710.0%10.015.00%
25Chestnut Hse, Millennium ParkOfficeDublin Catchment6,2005078.2%5869.5%3.33.32%
26Hazel Hse, Millennium ParkOfficeDublin Catchment3,4603419.8%3359.7%3.24.80%
27Willow Hse, Millennium ParkOfficeDublin Catchment3,3002597.8%3169.6%3.64.50%
  Total 141,07511,1097.9%12,5668.9%4.67.77.2%

* 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

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