GRN.L Regulatory News (GRN)

PRELIMINARY RESULTS FOR THE PERIOD TO 30 JUNE 2014

STRONG MAIDEN PERFORMANCE; €748M COMMITTED; DUBLIN RECOVERY SET TO CONTINUE

Dublin, 8 September, 2014 - Green REIT Plc, ("Green REIT" or the "Company"), the Irish property investment company, today announces its results for the period from incorporation on 24 June 2013 to 30 June 2014.

HIGHLIGHTS FOR THE PERIOD ENDED 30 JUNE 2014:

§ Total of €710m raised from IPO in July 2013 and secondary offering in May 2014

§ Efficient investment of €365 million to 30 June 2014, with a further €383 million committed at that date, bringing the total invested and committed to €748 million

§ High quality portfolio of 17 assets assembled, with a Dublin focus (90% by portfolio value)

§ High concentration in Dublin offices (74% by portfolio value)

§ Attractive investment income yield of 7.0%

§ CIO and COO on board to complement the existing management team

§ Confident of further opportunities to invest

§ Discussions well progressed with lenders on additional debt financing

§ Further headroom to invest €322 million into new opportunities

Financial:

§ NAV of €727.8 million, with a NAV per share of 109.1 cents

§ Net profit of €43.1 million, with earnings per share of 12.4 cents

§ Property valuation - 14.2% increase on purchase price, with a weighted average of 50% initial equity raised invested over the period

§ Loan to value of 9.2% on total assets including JV assets and debt

The Portfolio:

§ Total passing rents of €28.5 million per annum

§ 90% portfolio occupancy rate by floor area

§ Yields:

1 Based on passing rent at 30 June 2014 and total portfolio

2 Based on passing rent at 30 June 2014 and investment assets only

§ Value by geography : 90% located in Dublin

§ Total floor area of 1.55 million square feet (144,324 square metres)

§ Portfolio weighted average unexpired lease term of 6 years (to earlier of lease break and expiry, excluding residential element)

§ Value by sector: 73.5% offices, 17.5% retail, 3.6% development land, 2.4% industrial and 3% other

§ Refurbishment and development opportunities: planning permissions totalling approximately 700,000 square feet at Central Park, 112 acres of land at Dublin airport, properties at Mount Street, Molesworth Street and Harcourt Road in Dublin city centre

Further acquisitions with contracts exchanged

§ Sapphire Portfolio: Three office buildings at George's Quay and George's Court in Dublin 2 together with Westend Retail Park in Blanchardstown, Dublin 15 comprising 649,000 square feet of net lettable space in total, with 429,000 square feet of office space and 220,000 square feet of retail. Total passing rent €23.7m per annum from the portfolio and a contract price of €375 million.

§ 13-17 Dawson Street: prime office redevelopment opportunity in Dublin city centre. Contract price €23 million.

Asset Management and Development

§ Asset management initiatives underway and yielding positive results

§ Development/redevelopment opportunities at 6 locations:

- Central Park

- Harcourt Road

- Molesworth Street

- Mount Street

- Horizon Business Park

- Dawson Street (contracted, closing in October 2014)

Dividends

Dividend of 0.92 cent per share; a total dividend of €6.12 million.

Outlook

§ Efficient deployment of capital and execution of investment strategy

§ High quality portfolio assembled and strong pipeline of assets under contract

§ Focus on asset management and development of portfolio of assets assembled

§ Further debt facilities under negotiation to take advantage of opportunities and therefore enhance shareholder returns

§ Recovery in the market set to continue, particularly in the Dublin office sector

§ Well positioned for income and capital growth and the delivery of targeted shareholder returns

Gary Kennedy, Chairman of Green REIT plc, commented: "Green REIT's first twelve months has been characterised by momentum, in which we have successfully assembled our current portfolio of property assets. The real estate market is recovering at a steady pace alongside the general improvement in the Irish economy, but particularly in Dublin where 90% of our assets are located by value. We are well below our target loan to value ratio of 35% and therefore have headroom of a further €322 million to invest in both new opportunities and our existing assets."

Stephen Vernon, Executive Chairman of Green Property REIT Ventures Limited, added: "Real estate as an asset class is benefiting from a sustained low interest rate environment and significant capital chasing yield. This is particularly the case in Ireland which is in a virtually zero interest rate environment, despite being a growth economy. We expect our portfolio to continue to benefit from this favourable economic climate."

Pat Gunne, Chief Executive of Green Property REIT Ventures Limited, added: "Having successfully invested or committed all of our equity capital from the IPO and subsequent fundraise, we are now focusing on exploiting the very valuable asset management and development initiatives within our portfolio."

ENDS

Contacts

Green Property REIT Ventures (Investment Manager to the Company)

Niall O'Buachalla, COO

+353 (0) 1 2418400

FTI Consulting (IR and PR to the Company)

Dublin London

+353 (0) 1 6633686 +44 (0) 20 7831 3113

Mark Kenny Stephanie Highett

Jonathan Neilan Giles Barrie

Melanie Farrell Nina Legge

greenreit@fticonsulting.com 

About Green REIT plc

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

Note on forward-looking information

This Announcement contains forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the 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 referred to in this paragraph 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.

Results

For the period ended

30th June 2014

Green REIT plc and Subsidiaries

Directors and other information

Directors Gary Kennedy (Chairman)

Pat Gunne (appointed 3rd June 2014:)

Jerome Kennedy

Gary McGann (appointed 3rd June 2014) 

Stephen Vernon (British)

Thom Wernink (Dutch)

Secretary Mark Munro

Registered office Styne House

Hatch Street Upper

Dublin 2

Investment Manager Green Property REIT Ventures Ltd.,

Styne House

Hatch Street Upper

Dublin

Auditors KPMG

Chartered Accountants

1 Stokes Place

St. Stephen's Green

Dublin 2

Solicitors Arthur Cox

Earlsfort Centre

Earlsfort Terrace

Dublin 2

Principal Bankers BNP Paribus S.A.,

Dublin Branch

5 Georges Dock

IFSC

Dublin 1

Valuers CBRE

Connaught House

1 Burlington Road

Dublin 2

Jones Lang LaSalle Ltd.,

10/11 Molesworth Street.,

Dublin 2

Website www.greenpropertyreit.com

Forward-looking statements

These results for the period ended 30th June 2014, may contain certain "forward-looking statements" with respect to Green REIT Plc., and

the Group's financial condition, results of operations, business, and the Group's 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 referred to in this paragraph 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,

Chairman's Statement

The period, from incorporation on 24 June 2013 to 30 June 2014, has been a very active one for the Company, in which it invested or committed to invest €749 million in the acquisition of 24 properties, one of which was sold, and 6 of which were contracted but yet to be completed at 30 June 2014. Since 30 June 2014 the Company contracted to acquire a prime redevelopment opportunity on Dublin's Dawson Street for €23 million. The acquisition of the Sapphire Portfolio for €375 million, announced on 11 June 2014, is due to complete in October 2014.

The Board is pleased with the progress and performance of the Company to date, in particular with delivery of its stated investment strategy. The total equity raised from shareholders of €685 million net of costs has now been fully invested or committed. This efficient but disciplined investment has been ahead of the Company's targets and has been deployed in assembling a substantial portfolio of properties which is well positioned for active asset management and development initiatives. This is against a positive economic backdrop in the recovering Irish economy, particularly in Dublin, where 90% by value of the Company's properties are located.

The Company is in advanced discussions with lenders with a view to securing a cost effective and flexible debt facility which will fund further acquisitions and development initiatives to be implemented by the Company. It remains the intention of the Board to use gearing to enhance shareholder returns and that total gearing will not exceed 35 per cent.

Financial Results and Position

Summary Financial Information

The Company's properties, including its interest in joint venture properties, are valued at €402.9 million at 30 June 2014, reflecting an uplift on their aggregate contract prices of 14.2% or 10.9% when one-off acquisition costs are included. One-off acquisition costs of €10.3 million were incurred in acquiring the properties, with a further €8 million expected to be incurred on properties under contract as at 30 June 2014.

The Company's net asset value ('NAV') at 30 June 2014 was €727.8 million (109.1 cents per share). This growth in NAV reflects the phased acquisition timeline in building the portfolio over the 8 month period since the initial acquisitions in November 2013. The Company's total annual passing rent at 30 June 2014 was €28.5 million (including its share of JV rents), which will increase to €52.2 million with the completion of acquisitions under contract at 30 June 2014.

The Board expect to declare and pay a dividend of 0.92 cent per share; a total dividend of €6.12 million, being 85% of the Property Income from the Company's Property Rental Business in that period, both as defined in Irish REIT legislation.

Corporate Governance

The Board aspires to best practice in corporate governance recognises the benefits of an effective board of directors. To that end two new directors, Gary McGann and Pat Gunne, were co-opted to the Board on 4 June 2014. They bring with them a wealth of experience in executive positions within recognised companies both in Ireland and internationally. This increases the number of directors to 6, 4 of whom are independent and 2 are nominee directors of the Investment Manager, in line with the Company's prospectuses. In addition, the committees of the Board which were established in the period are performing effectively and the Board would like to thank the committee members for their good work in that regard.

During the period the Company took up membership of EPRA, the European Public Real Estate Association, a not for profit body established to promote, develop and represent the European public real estate sector and which formulates best practise for the European real estate sector in reporting and accounting. We expect the Company to be included in the EPRA Global Real Estate Index following EPRA's next scheduled review in March 2015. This index is the leading benchmark of the listed real estate sector globally.

With effect from 22 July, 2014, the Company's investment manager, Green Property REIT Ventures Limited, was authorised by the Central Bank of Ireland as an alternative investment fund manager ("AIFM") in accordance with the European Union (Alternative Investment Fund Managers) Regulations, 2013 (the "AIFM Regulations"), and was appointed as the AIFM of the Company.

The Investment Manager

The Company is managed by Green Property REIT Ventures Limited (the Investment Manager), led by Stephen Vernon and Pat Gunne. The Board has worked very well with the Investment Manager in the period and looks forward to continuing to work closely with the team on further acquisitions and as the Company implements asset management and development initiatives across the portfolio in the period ahead. The quality of the properties acquired and the tenants in our properties, together with the strong yield being generated, reflects the strengths of the Investment Manager in seeking out, appraising and completing the acquisition of high quality investment opportunities through its broad network of industry contacts.

Outlook

The Board believes that the Company is well positioned for the future, having assembled a highly attractive portfolio of properties in line with the Company's stated investment policy. The Company has significant financing capacity and a very experienced and focused Investment Manager. With improving economic conditions in Ireland, particularly in Dublin, the Board believes that the Company will continue to deliver strong shareholder returns.

The Company is committed to the generation of strong rental income and capital growth through the active management and development of its portfolio of properties. We look forward to the year ahead as we build on our initial successes.

Gary Kennedy

Chairman

8 September 2014

Investment Manager's Review

Successful Execution of Investment Strategy

The period of just over a year to 30 June 2014 has been a particularly active one for Green Property REIT Ventures Limited as Investment Manager of the Company. We have in this period successfully implemented the Company's investment strategy, which in summary is to create a commercial property portfolio with strong income and value add potential, with a Dublin focus, to deliver income and capital growth through opportunistic investments, active property management and prudent use of debt finance. Progress to date against this strategy is evidenced by the following summary of the portfolio highlights at 30 June 2014:

· 17 properties held at 30 June 2014, valued at €402.9 million at that date, 14.2% above contract price excluding acquisition costs (10.9% when one-off acquisition costs are reflected).

Summary Timeline of Acquisitions (all in €'000):

§ Total passing rents of €28.5 million per annum

§ Total floor area of 1.55 million square feet (144,324 square metres)

§ 90% portfolio occupancy rate by floor area

§ Portfolio weighted average unexpired lease term of 6 years (to earlier of lease break and expiry, excluding residential element)

§ Yields:

3 See Portfolio Overview section for details of portfolio composition

4 Based on passing rent at 30 June 2014 and total portfolio

5 Based on passing rent at 30 June 2014 and investment assets only

§ Value by geography : 90% located in Dublin, with 40% of this in Dublin City Centre.

§ Value by sector: 73.5% offices, 17.5% retail, 3.6% development land, 2.4% industrial and 3% other

§ Top 10 tenants account for €19.7m/70% of total passing rent

§ Refurbishment and development opportunities: 7.4 acres of land at Central Park, 112 acres of land at Dublin airport, properties at Mount Street, Molesworth Street and Harcourt Road in Dublin city centre.

Activity since 30 June 2014

§ 6 properties contracted at 30 June 2014, with a contract price of €375m ('Sapphire Portfolio'). Closing is expected to take place in October 2014. These properties will increase total annual passing rent from €28.5m to €52.2m per annum and will add 649,000 square feet (60,274 square metres) of floor area, bring the total to 2.2 million square feet (204,000 square metres).

§ 1 property contracted since 30 June 2014 at 13-17 Dawson Street in Dublin city centre which is a prime redevelopment opportunity.

Efficient Investment of Capital

§ Total invested as at 30 June 2014: €365 million, funded by €290 million of equity and €75 million of debt secured on Central Park through the Central Park joint venture

§ Total invested and committed including Sapphire portfolio: €748 million, funded by €673 million of equity and €75 million of debt secured on Central Park

§ Further capital of €23.7m committed in August 2014 to the acquisition of 13-17 Dawson Street in Dublin city centre

§ Combination of on- and off-market acquisitions

§ Use of gearing and joint venture structure to acquire large properties and to enhance shareholder returns

The Market

Having experienced a severe recession in the period 2008 to 2012 the Irish economy began on its path to recovery in early 2013 and there is a feeling of cautious optimism, with many of the economic fundamentals signalling that the recovery is set to continue.

The impact of this recovery on the property sector in Ireland is evident in particular in the Dublin office occupier market, where vacancy rates are at low levels and where there is little supply of quality office space in Dublin city centre. Despite prime rents being at a level which would make development commercially viable, there is only one office block under construction in Dublin city centre together with the redevelopment of the former Bank of Ireland headquarters on Baggot Street in Dublin 2. With supply being well below trend and demand, we expect further growth in Dublin office rents. With 73.5% by value of the Company's properties being Dublin offices, several of which are primed for redevelopment, the Company is well positioned to take advantage of this recovery in the short to medium term.

With regard to the retail occupier market, improving economic conditions would lead us to believe that retail at the prime end has bottomed and is beginning to turn. Retail sales volumes in Ireland are up 6.5% in the first half of 2014 and the ESRI index of current economic conditions, based on how consumers feel about their current financial circumstance, rose by 8% in the year to June 2014. This upturn is evidenced by the emergence of some retailers who are prepared to consider selective expansion. It has not yet translated into rental growth but with a shortage of good quality, well located retail units, growth should emerge in the short term.

With regard to the investment market we are continuing to see very strong competition for properties, with investor demand well in excess of the stock available, which is driving yields down, particularly on Dublin city centre offices. Our expectation is that NAMA and other lenders will increase the pace of their deleveraging in the second half of 2014 and onwards and that competition for these assets will be strong. To date, there has been a limited amount of retail investments available to buy. Recently a regional shopping centre portfolio has been sold, where demand was stronger than expected with a number of new entrants competitively bidding for the portfolio. This is an encouraging indication that the investor community believes this sector has bottomed and now offers opportunities for growth.

Large and Complex Transactions

Our ability to compete for and to close out on the acquisition of Central Park in March 2014 was one of the highlights of the period to 30 June 2014. This was a competitive process with some of the largest private equity investors in the world involved, where receivers appointed by NAMA were the vendors. We teamed up with PIMCO, one of our cornerstone investors at IPO and our co-investor for large and complex transactions, and with Kennedy Wilson on the residential component. With a total contract price of €311.5 million we believe that this was the single largest property transaction by NAMA to date. Post completion the bridging facility used by the JV to part fund the acquisition was refinanced with Bank of Ireland, procuring the Company's first bank borrowings.

The Sapphire Portfolio

We look forward to completing the acquisition of the Sapphire Portfolio, which was contracted in June 2014 subject to conditionality in respect of consent to the transaction from the vendors' lenders. We expect this consent to be forthcoming and for the transaction to complete in October 2014. The Sapphire Portfolio is a substantial portfolio of 3 prime Dublin office buildings which includes the iconic George's Quay, and a significant retail park along with ancillary office buildings in Blanchardstown, Dublin 15. These properties when acquired will add €23.7 million to the Company's annual passing rent and will further enhance shareholder returns.

Financing

The Company has a strong balance sheet, with a low loan to value ratio of 9.2%6 and significant debt headroom. Our plans to raise additional debt finance are well advanced and we expect to make a positive announcement in that regard in the near term. This additional debt finance will allow us to take advantage of further opportunities that might arise, at a relatively low cost, without seeking further funds from shareholders. We use prudent levels of leverage to enhance shareholder returns, while always being mindful of the need to protect against downside valuation risk.

The Team

The hiring of Caroline McCarthy in September 2013 as our Chief Investment Officer, and Niall O'Buachalla in January 2014 as our Chief Operations Officer, were clear messages to the marketplace and to our investment community of our strategy to build upon what we consider to be Ireland's most formidable property team. This is complementary to the exceptional development and asset management team already in place.

Priorities for the Year Ahead

We have now assembled a portfolio of 17 properties, with a further 6 properties contracted at 30 June 2014, investing or committing to invest €749 million in doing so. We are focused on executing our asset management and development strategies across the portfolio, in line with the business plans that are in place for each property. We continue to assess acquisition opportunities that fit with our

investment policy, an example being 13-17 Dawson Street which we contracted to acquire in August 2014.

The quality of Green REIT plc's tenants, the active asset management initiatives underway and the potential for its development properties all augur well for the future and for the delivery of strong returns for our shareholders.

Stephen Vernon Pat Gunne

Executive Chairman Chief Executive

8 September, 2014

6 On total assets and including joint venture (JV) assets and debt

PORTFOLIO OVERVIEW

1. Top 10 occupiers by passing rent

1 Green REIT plc's share only

2. Value by Locations

1 Green REIT plc's share only

3. Value by Sector

1 Green REIT plc's share only

4. Passing rent by Sectors

1 Green REIT plc's share only

5. Floor Area by Sectors

1 Green REIT plc's share only

2 Leasable areas

6. Passing Rent by Tenant Business Sector

1 Green REIT plc's share only

7. Passing Rent by Unexpired Lease Term

1 Green REIT plc's share only

2 Unexpired Term is the rent-weighted average remaining term on leases subject to lease expiry/ break clauses (whichever comes first)

8. Lease lengths by tenant business sectors (in WAULT years)

1 Green REIT plc's share only

2 As at 30 June 2014/ Unexpired Term is the rent-weighted average remaining term on leases subject to lease expiry/ break clauses (whichever comes first)/ Excludes residential element

9. Lease lengths by locations (in WAULT years)

1 Green REIT plc's share only

2 As at 30 June 2014/ Unexpired Term is the rent-weighted average remaining term on leases subject to lease expiry/ break clauses (whichever comes first)/ Excludes residential element

10. Yields

1 Green REIT plc's share only

2 Calculated as passing rent at 30 June 2014 over the June 2014 valuation plus notional purchaser's costs

3 Calculated as passing rent at 30 June 2014 over the actual purchase price plus the actual purchaser's costs

4 Calculated as passing rent at acquisition over the actual purchase price plus the actual purchaser's costs

11. Occupancy

Occupancy % by sq ft: 90.0%

Occupancy % by ERV: 90.5%

12. Total WAULT (to the earlier of next break or lease expiry)

6.0 years1

1 As at 30 June 2014/ Unexpired Term is the rent-weighted average remaining term on leases subject to lease expiry/ break clauses (whichever comes first)/ Excludes

13. Portfolio breakdown

MARKET OVERVIEW

Irish Property Market Overview

Half year estimates by the Economic and Social Research Institute (ESRI) suggest the Irish Economy is continuing its strong recovery. GDP growth for Q1 2014 was 2.7% on the previous quarter and 4.1% year-on-year, while the current forecast for 2014 is for growth of 3%. In addition, with strong export growth and better than expected budgetary returns, GNP growth is forecast to be 3.4% for the year. Unemployment continues to decline from a recessionary high of 15.1% and is forecast to fall from its current level of 11.5% to 9.8% by the end of 2015.7 Foreign Direct Investment is a large component of the Irish Economy, the IDA Ireland confirm that at present 161,112 persons are directly employed in 1,150 overseas companies which are located in Ireland.

The first half of 2014 has seen continued momentum in the Irish commercial property market, with a number of portfolio and single asset transactions concluding in the period. Up to the end of June a total of €1.37 billion of acquisitions were recorded, which compares to €1.8-€1.9 billion for the full year in 2013. 89 Market commentators are suggesting this level will be exceeded in the second half of the year.

Sales of office investment have dominated the market in the first half of 2014, accounting for 63% of the deals completed, with the remainder of the investment divided between residential, industrial and retail. Of the total investment, 97% was located in Dublin. 2 There are a number of retail parks and shopping centres on the market or about to come to the market, which will provide evidence of pricing for this sector. What is emerging is that there is an extensive list of buyers of retail including new entrants, indicating positive sentiment to the sector. 4

The supply continues to come largely from the banks, who have accelerated their deleveraging programmes, with Lloyds, NAMA, Ulster Bank and Bank of Ireland being the main sources of supply. In addition there is evidence of some private equity firms re-trading properties they acquired and private individuals also selling. With the volume of investment rising, sellers are increasingly confident of market pricing and we are seeing more "off market" deals occurring.

In addition to selling assets, the banks have also been selling loans. In 2013, the sale of property loans accounted for an additional €760m of capital indirectly deployed into the property market. In the first half of 2014, best estimates are that over €18.8 billion of property loans have been sold. 3 This unprecedented volume of loan sales is partly as a result of the banks deleveraging programmes and also as a result of the Government decision to liquidate IBRC (formerly Anglo Irish Bank). Private Equity Groups have been the dominant loan buyers including; Loanstar, Deutsche Bank, Blackstone and Cerberus. Whilst this volume is unlikely to be repeated in such a short timeframe, there are likely to be further loan sales, predominantly from NAMA, Ulster Bank and the residual of the IBRC loan book.

At the prime end in Dublin we have seen continued yield compression in the first half of 2014. Since December 2013, prime Dublin office yields have moved from 5.75% to 5.00%, Retail (High Street) from 5.50% to 4.75%, Retail Warehousing from 7.25% to 6.50% and Industrial from 8.25% to 8.00%, and all are trending stronger. 4 Investment Property Databank ("IPD") recorded total ungeared returns in Q2 2014 at 8.50%, of which the office sector was the strongest performer at 10.1% and industrial the weakest at 4.5%. The annualised total all-property return to the end of Q2 2014 was 26.6%. 5

Irish investors accounted for over 55% of the market in the first half of 2014, US investors for over 32%, with Europe, Middle East, Asia, UK and other accounting for the remaining 13%. 3 The buyer Nationalities remain very diverse and a recent trend is the re-emergence of interest from European Institutional buyers, typically with a low cost of capital.

7 ESRI Quarterly Economic Commentary Summer 2014

8 JLL Ireland Investment Market Report Q2 2014

9 CBRE Research Department

4 CBRE Bi-monthly Research Report July 2014

5 SCS/IPD Ireland Quarterly Property Index to 30 June 2014

Sector Commentary

Office

The Dublin office leasing market has continued at pace, with total take-up for the first half of 2014 reaching just over 1 million square feet, with activity in Dublin CBD accounting for 60% of the total market and Dublin 2 accounting for 38% of the take-up. The IT sector dominated new lettings, accounting for 33% of take-up, followed by Consumer Services (19%), Financial (15%), Public Sector (14%) and Business Services (12%). The remainder (7%) is a mix of Industry and Professional. 3

The average deal size in the 6 months to June 2014 was 9,757 square feet, with 65% of new lettings being less than 10,000 square feet. There are currently 1.3 million square feet of active letting requirements in the market. 6 Recent lettings include; 75,000 square feet to Yahoo, 70,000 square feet to Amazon, 55,000 square feet to Dropbox, 45,000 square feet to Riot Games, 35,000 square feet to Oracle and 60,000 square feet in two buildings to Government and Health Departments.

Overseas companies comprise a substantial component of office take up. The IDA Ireland confirm that 9 of the 10 Global Software Companies, 9 of the 10 Global Pharmaceutical Corporations, 10 of the 10 "Born on the Internet" Companies, 15 of the 20 Global Medical Companies and 50% of the World's leading Financial Service Firms are located in Ireland.

The total office vacancy rate in Dublin continues to fall, down to 13.67% at the end of Q2 2014. In the South suburbs, the vacancy rate is currently 9% (979,299 square feet). Within Dublin CBD the vacancy rate is 12.39% of which the Grade A vacancy rate is 6.51% (1.8 million square feet). In prime Dublin city centre (Dublin 2&4) the Grade A vacancy rate is currently 3.02% (563,824 square feet). 3

Prime headline quoting rents for Grade A buildings in the Dublin 2/4 CBD increased by 25% in 2013 and have increased by a further 15% during the first half of 2014. 4 Quoting prime Dublin office rents currently stand at €45 per square foot, with deals being done at €40-€45 per square foot. 2 Lease terms are also moving in the landlord's favour, with evidence of reduced incentives. 2 We anticipate there will be additional upward pressure on these rents over the remainder of the year.

The ever-reducing supply of Grade A office accommodation in Dublin city centre and the stronger than anticipated rental growth means that refurbishment of older buildings and speculative development of new offices now appears viable. In addition, given this shortage of supply, it is likely that new entrants to the market may have to consider locating on the edge of the city centre or in suburban locations. 2

7 JLL Dublin Retail Market Report Q2 2014

Retail

The retail sector is increasingly positive, with unemployment levels falling, the economy now growing and indications that the 2014 Government budget may give some form of modest income tax reduction. With this backdrop, it is no surprise that retail sales volumes are up 6.5% in the first half of 2014 and the ESRI Index of current economic conditions, based on how consumers feel about their current financial circumstance rose by 8% in the year to June 2014. 

While rental growth is yet to emerge, tenant demand is stronger and there is evidence of reduced incentives on new lettings. 7 Demand is typically focused on prime High Street and the better shopping centres and retail parks. Secondary locations with a limited catchment continue to struggle and retailers remain cautious, looking only at expansion opportunities in the best locations and for the best configured units.

On the high street in Dublin the vacancy rent is 3.2% with only 2 vacant units on Grafton Street and 3 on Henry Street.7 HMV and H Samuel reopened on Grafton Street in 2014 and Holland & Barrett, Hairspray, King of Trainers and Pamela Scott opened on Henry Street. In addition, Boots, HMW and Caffe Nero have all announced plans to extend their operations across Ireland.7

Outside of the prime high street, in the greater Dublin area, lettings in Q2 have occurred to the following retailers: TK Maxx, Boots, Costa Coffee, McDonalds and Aldi.4

Looking forward, supply constraints in some locations are starting to emerge, which is likely to lead to rental growth in the short term. 7 In addition improvements in the residential market, particularly in the greater Dublin area is starting to filter through to the retail warehousing sector. Overall, after a tough number of years, retail appears to have turned the corner.

Industrial

While take-up in Q2 2014 was up 34% compared to Q1 2014, it is down when the first half of 2014 is compared to the first half of 2013 (916,459 square feet v 1.28 million square feet).8 This can partly be explained by the length of time it is taking to close transactions, with a large pipeline expected to close in Q3. It appears however that the year-end total may not reach the level achieved in 2013.8

Demand continues to focus on prime properties, offering modern facilities, however the emergence of shortages of the best quality units means that most of the take-up has been concentrated in secondary units.8

Of deals done (measured by floor space), 79% were sales of industrial units with the remainder being lettings. The most popular locations continue to be the south west of Dublin, accounting for 52% of activity, with the north west of Dublin, accounting for 35%.8

Dublin industrial rents have remained stable at approximately €5.75-€6.25 per square foot but there is evidence of a tightening in inducements with the standard 6 month rent free period on most 5 year leases reducing to 3-6 months. 4

The agents continue to anticipate rental growth at the prime end within the short term. 4 8 However, until it emerges development will remain unviable. 

8 JLL Dublin Industrial Market Report Q2 2014

Development Land

The volume of land sales in Ireland in the first half of 2014 is higher than the entire of 2013, with 54 development sites sold, totalling €203 million compared to 75 deals in the whole of 2013 totalling €200 million. 4 Many of the transactions comprise small lot sizes, typically for small housing developments.

The recent sale of Burlington House in Dublin 4 which has planning permission for 170,000 square feet of new offices for a reported price of €40m is a good indicator of demand for prime office development sites. 4

It is anticipated that there will be some large land holdings released by the banks in the final half of the year, which could significantly boost the volume for the year end, including 400 acres of development land in Cherrywood, south Dublin, which is on the market at a quoting price of €220m. 4

Green REIT plc and subsidiaries

Consolidated financial statements for the period from incorporation on 24 June 2013 to 30 June 2014

Content

Consolidated Statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes forming part of the consolidated financial statements

Glossary

Green REIT plc

Consolidated statement of comprehensive income

for the period from incorporation on 24 June 2013 to 30 June 2014

The accompanying notes are an integral part of these financial statements.

1 - As outlined in note 1.

Green REIT plc

Consolidated statement of financial position

as at 30 June 2014

The accompanying notes are an integral part of these financial statements.

Green REIT plc

Consolidated statement of changes in equity

for the period from incorporation on 24 June 2013 to 30 June 2014

The accompanying notes are an integral part of these financial statements.

Green REIT plc

Consolidated statement of cash flows

for the period from incorporation on 24 June 2013 to 30 June 2014

The accompanying notes are an integral part of these financial statements.

Green REIT plc

Notes

forming part of the consolidated financial statements

1. Basis of preparation and significant accounting policies

The financial information in this announcement was approved by the Board of Directors on 8 September 2014 and does not comprise statutory financial statements for the period ended 30 June 2014, within the meaning of the Companies Acts 1963 to 2013. The statutory financial statements for the period from incorporation on 24 June 2013 to 30 June 2014 will be finalised based on the financial information presented in this preliminary announcement and will be delivered to the Companies Registration Office in due course.

Statement of compliance

These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (EU IFRS), which comprise standards and interpretations approved by the International Accounting Standards Board (IASB).

The Group has early adopted the following standards in the financial period:

IAS 27 (revised) - Separate Financial Statements;

IAS 28 (revised) - Investments in Associates and Joint Ventures;

IFRS 10 - Consolidated Financial Statements;

IFRS 11 - Joint Arrangements; and

IFRS 12 - Disclosure of Interests in Other Entities.

Going concern

The Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that it is appropriate to prepare our consolidated financial statements on a going concern basis.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for investment properties, short term investments and derivatives, which are measured at fair value.

Functional and presentation currency

The financial information is presented in Euro, which is the Company's functional currency. All financial information presented in Euro has been rounded to the nearest thousand except when otherwise indicated.

Underlying pre-tax earnings

The European Public Real Estate Association (EPRA) has issued Best Practices Recommendations, the latest update of which was issued in January 2014, which give guidelines for performance measures. EPRA earnings is the profit after tax excluding investment and development property revaluations and gains or losses on disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation. Underlying earnings consists of the EPRA earnings measure.

Green REIT plc

Notes (continued)

1. Basis of preparation and significant accounting policies (continued)

Amendments to IFRSs that are not yet effective

A number of new IFRS requirements are effective for periods beginning after 1 July 2014, and have not been applied in preparing these consolidated financial statements. These include the following:

· Amendments to IFRS 11: Accounting for acquisitions of interests in Joint Operations (effective 1 January 2016)

· Amendments to IAS 16 and IAS 38: Clarification of acceptable methods of depreciation and amortisation (effective 1 January 2016)

· Amendments to IAS 32: Offsetting financial assets and financial liabilities (effective 1 January 2014)

· IAS 36 - Recoverable amount disclosures for non-financial assets (effective 1 January 2014)

· IFRS 15: Revenue from contracts with customers (effective 1 January 2017)*

· IFRS 9 Financial Instruments (2009, and subsequent amendments in 2010 and 2013) (expected to be effective 1 January 2018 at the earliest)*

*Not yet endorsed by the EU

The Group is currently in the process of its assessment of the impact of these new IFRS requirements.

Use of estimates and judgements

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.

Information about critical judgements in applying accounting policies that have the most significant effect on amounts recognised in the consolidated financial statements is included in the accounting policies and the notes to the financial statements.

The key accounting judgement and estimate in these financial statements is the valuation of the property portfolio. This is discussed in further detail in note 7.

Green REIT plc

Notes (continued)

1. Basis of preparation and significant accounting policies (continued)

Measurement of fair values

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

A number of the Group's accounting policies and disclosures require the measurement of fair values. When measuring the fair value of an asset or liability the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

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

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3:inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Group.  The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvements with the entity and has the ability to affect these returns through its power over the entity. The financial information of subsidiaries is included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

Joint arrangements

Under IFRS 11, Joint Arrangements, the Group classifies its interests in joint arrangements as either joint operations or joint ventures depending on the Group's rights to the assets and obligations for the liabilities of the arrangements. When making this assessment, the Group considers the structure of the arrangements, the legal form of any separate vehicles, the contractual terms of the arrangements and other facts and circumstances.

When the Group has rights to the assets and obligations to the liabilities, relating to an arrangement, it accounts for each of its assets, liabilities and transactions, including its share of those held or incurred jointly, in relation to the joint operation.

When the Group has rights only to the net assets of an arrangement, it accounts for its interest using the equity method. Investments in joint ventures are accounted for using the equity method and are recognised initially at cost. The cost of the investments includes transaction costs.

Green REIT plc

Notes (continued)

1. Basis of preparation and significant accounting policies (continued)

Basis of consolidation (continued)

Accounting policy alignment and transactions elimination on consolidation

Accounting policies of subsidiaries or joint ventures which differ from those of the Group are adjusted for when preparing consolidated financial statements.

All intra-group transactions, balances, income, unrealised gains, losses and expenses are eliminated on consolidation. Unrealised gains arising from transactions with joint ventures are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same manner save where the Group considers that an impairment provision maybe warranted.

Investment property

Investment property is property held either to earn rental income, or for capital appreciation (including future re-development) or for both, but not for sale in the ordinary course of business. The Group does not have any properties held for resale or trading purposes.

Investment property is initially measured at cost including related acquisition costs and subsequently valued by professional external valuers at their respective fair values at each reporting date. The difference between the fair value of an investment property at the reporting date and its carrying value prior to the external valuation is recognised in profit or loss as a fair value gain or loss.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.

Properties leased out to tenants under operating leases are included in investment property in the statement of financial position.

Investment properties are treated as acquired at the point where the Group assumes the significant risks and returns of ownership which normally occurs when the conveyancing contract has been performed by both buyer and seller and the contract has been deemed to have become unconditional and completed. Investment properties are deemed to have been sold when the buyer has assumed the risks and rewards of ownership and the contract has been completed.

Additions to investment properties consist of construction and other directly attributable costs such as professional fees and expenses and in the case of investment properties under development capitalised interest where applicable. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs. Where the Group begins to redevelop an existing investment property the property continues to be held as an investment property.

External, independent valuers, having appropriate recognised and relevant professional qualifications and recent experience in the location and category of property being valued, value the Group's investment property portfolio at each reporting date, in accordance with the Royal Institution of Chartered Surveyors Valuation Standards (RICS).

Green REIT plc

Notes (continued)

Investment property (continued)

Critical accounting judgements and key estimations of inherent uncertainty in investment property valuations

The fair values derived are based on anticipated market values for the properties, being the estimated amount that would be received to sell the assets in an orderly transaction between market participants.

As a result of all of these factors the ultimate valuation the Group places on its investment properties is subject to some uncertainty which may not turn out to be accurate, particularly in times of macro-economic volatility.  

The valuation of the Group's investment property portfolio is inherently subjective as it requires among other factors, assumptions to be made regarding the ability of existing tenants to meet their rental obligations over the entire life of their leases, the estimation of the expected rental income in to the future, an assessment of a property's ability to remain as an attractive technical configuration to existing and prospective tenants in a changing market and a judgement to be reached on the attractiveness of a building, its location and the surrounding environment. While these and other similar matters are market standard considerations in determining the fair value of a property in accordance with the RICS methodology they are all subjective assessments of future outturns and macro-economic factors which are outside of the Group's control or influence and therefore may prove to be inaccurate long term forecasts.

The RICS property valuation methodology is considered by the Board to be the valuation technique most suited to the measurement of the fair value of property investments. It is also the primary measurement of fair value that all major and reputable property market participants use when valuing a property investment.

Rental income

Rental income from investment property is recognised on an accruals basis as revenue on a straight-line basis over the term of the lease. The Group considers this is the most representative systematic time pattern in which the benefits of ownership of the assets will accrue to the business. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

Where a rent free period is included as an incentive in a lease the rental income forgone is allocated evenly over the period from the date of the lease to the earliest termination date of the lease. Where a lease incentive takes the form of an incentive payment to a tenant the resultant cost is amortised evenly over the remaining life of the lease to its earliest termination date.

Contingent rents, such as turnover rents, and indexation adjustments are recorded as income in the periods in which they are earned. Rental concessions are recorded as adjustments to income in the rental periods to which the concession relates.

Green REIT plc

Notes (continued)

Rental income (continued)

A rent adjustment or review due under a lease which has not yet been settled at the reporting date is included in the results based upon a reasonable estimate of the amount the review will be settled at and then adjusted to actual outcome when the outstanding review is finally established.

Where the Group receives a surrender premium from a tenant for the early termination of a lease, the profit net of any direct costs associated with dilapidation and legal costs relating to that lease, is reflected in the accounting period in which the surrender took place.

Details on all rental incentives are provided to the external valuers for their consideration during their review of the investment property valuation at each reporting date.

Service charge income is recognised in the period in which it is earned.

Finance income and finance costs

The Group's finance income and finance costs comprise interest income, interest expense and related charges. Interest income or expense is recognised using the effective interest method.

Tax

Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse using tax rates enacted or substantively enacted at the reporting date.  

Green REIT plc

Notes (continued)

Financial instruments

Non-derivative financial assets

The Group initially recognises loans and receivables on the date that they are originated. All other financial assets (including assets designated as at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets. At 30 June 2014 the Group had the following non-derivative financial assets, which are classified as loans and receivables:

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments.

Short term investments

Short term investments represent investments in high quality investment grade money market fund portfolios comprised of money market instruments, short-term bond securities, repurchase agreements and cash and cash equivalents, with maturities ranging from 1 day to 12 months in duration.

Trade and other receivables

Trade and other receivables are initially recognised at fair value, which is usually the original invoiced amount and subsequently carried at amortised cost using the effective interest method less provision made for impairment, if applicable.

The fair values of trade and other receivables are estimated at the present value of future cash flows, discounted at the market rate of interest at the measurement date. Short-term receivables with no stated interest rate are measured at the original invoice amount if the effect of discounting is immaterial. Fair value is determined at initial recognition and, where appropriate for disclosure purposes.

Non-derivative financial liabilities

All financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument and are measured initially at fair value less initial direct costs and subsequently measured at amortised cost.

Green REIT plc

Notes (continued)

Financial instruments (continued)

Non-derivative financial liabilities (continued)

Fair value is calculated, for disclosure purposes, based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the measurement date.

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from the share premium account included in equity.

Derivative financial instruments

Derivatives are recognised initially at fair value; any directly attributable transaction costs are recognised in profit or loss as they are incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

2. Operating segments

The Group, including the Central Park Joint Venture is organised into four business segments, against which the Group reports its segmental information, being Retail Assets, Office Assets, Industrial Assets and Other Assets (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 internal reporting provided to the chief operating decision maker, who has 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 underlying performance of a segment is net rental income, as this measure illustrates and emphasises that segment's contribution to the reported profits of the Group and the input of that segment to earnings per share. By focusing on the prime performance measurement of net rental income, other key statistical data such as capital expenditure, valuation movements and once off exceptional items are separately highlighted for analysis and attention.

Green REIT plc

Notes (continued)

2. Operating segments (continued)

Information related to each reportable segment is set out below:

(i) Includes hotel and car park assets

The following table reconciles the segmental disclosures above to the consolidated financial position at 30 June 2014.

* Total cash and cash equivalents and short term deposits at 30 June 2014 is €370.9 million (note 10). The total segment assets per the unallocated segment above is €403.1 million and primarily represents cash and cash equivalents and short term investments. The difference primarily represents deposits paid on properties contracted for at 30 June 2014.Green REIT plc

Notes (continued)

3. Gross and net rental and related income

4. Net finance income

Green REIT plc

Notes (continued)

5. Profit for the period

The profit for the period has been arrived at after charging:

Green REIT plc

Notes (continued)

6. Taxation

Tax recognised in profit or loss

Green REIT plc elected for group REIT status with effect from July 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.

Instead, distributions to shareholders in respect of the property rental business are treated for Irish tax purposes as income in the hands of shareholders. Corporation tax is still payable in the normal way in respect of income and gains from a Group's residual business (generally including any property trading business) not included in the property rental business. The Group is also liable to pay other taxes such as VAT, stamp duty land tax, stamp duty, local property tax and payroll taxes in the normal way.

Within the Irish REIT regime, for corporation tax purposes the property rental business is treated as a separate business to the residual business. A loss incurred by the property rental business cannot be set off against profits of the residual business.

An Irish REIT is required, subject to having sufficient distributable reserves, to distribute to its shareholders (by way of dividend), on or before the filing date for its 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. Failure to meet this requirement will result in a tax charge calculated by reference to the extent of the shortfall in the dividend paid. A dividend paid by an Irish REIT from its property rental business is referred to as a property income distribution or PID. Any normal dividend paid from the residual business by the Irish REIT is referred to as a Non-PID dividend.

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

Green REIT plc

Notes (continued)

7. Investment property

The total consideration before acquisition expenses of the properties acquired up to 30 June 2014 was

€238.8 million and the total costs of acquisition which comprised of stamp duty payable at an average rate of 2%, legal services and other directly attributable costs arising from the transactions amounted to €9.9 million, resulting in total capitalised costs of €248.7 million to the Group on acquisition.

During the period, the Group disposed of an investment property located at 97 St. Stephen's Green, Dublin 2. At the date of disposal, the investment property had a carrying value of €0.6 million. The total consideration received amounted to €1.2 million (net of disposal costs). This resulted in a profit on disposal of €0.6 million.

The fair value of the Group's investment property at 30 June 2014 has been arrived at on the basis of valuations carried out at that date by external valuers; CBRE Ireland (CBRE) and Jones Lang LaSalle Ireland (JLL). JLL performed valuations on 56% of the investment property portfolio (by value), while CBRE performed valuations on the remaining 44%. The total fees earned by JLL and CBRE from the Group are less than 5% of their total Irish revenues.

The valuations performed by CBRE and JLL, which conform to the Valuation Standards of the Royal Institution of Chartered Surveyors and with IVA 1 of the International Valuations Standards, were arrived at by reference to market evidence of transaction prices for similar properties.

The Board of Directors determines the Group's valuation policies and procedures for property valuation. The Board decides which external valuer to appoint to be responsible for the external valuations of the Group's properties. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

The Group utilises the staff of the internal valuation department of its Investment Manager, whom hold relevant internationally recognised professional qualifications and are experienced in valuing the types of properties in the applicable locations. The Investment Manager reviews the valuations arrived at by the external professional valuers. This review includes a discussion with the Board and separately with the external valuers on the assumptions used, the process and methodology undertaking and a review of the data considered by the external valuers.

Green REIT plc

Notes (continued)

7. Investment property (continued)

For investment property, the income approach/yield methodology involves applying market-derived capitalisation yields to current and market-derived future income streams with appropriate adjustments for income voids arising from vacancies or rent-free periods. These capitalisation yields and future income streams are derived from comparable property and leasing transactions and are considered to be the key inputs in the valuation. Other factors that are taken into account include the tenure of the property, tenancy details, planning, building and environmental factors that might affect the property.

In the case of investment property under development, the approach applied is the "residual method" of valuation, which is the investment method as described above with a deduction for the costs necessary to complete the development together with an allowance for the remaining risk.

Everything else being equal, there is a positive relationship between rental values and the property valuation, such that an increase in rental values will increase the valuation of a property and vice versa. However, the relationship between capitalisation yields and the property valuation is negative, therefore an increase in capitalisation yields will reduce the valuation of a property and vice versa. There are interrelationships between these inputs as they are determined by market conditions and the valuation movement in any one period depends on the balance between them. If these inputs move in opposite directions (e.g. rental values increase and yields decrease) valuation movements can be amplified whereas if they move in the same direction, they may offset reducing the overall net valuation movement.

The Board, after discussions between the Audit Committee and the Group's external valuers ultimately decides whether a property's fair value has been reliably determined.

At 30 June 2014, the Group considers that all of its investment properties fall within Level 3 fair value as defined by IFRS 13 and therefore believe that the income approach / yield methodology using market rental values capitalised with a market capitalisation rate or yield used by the valuers is the best method to determine the fair value of the investment properties. As further outlined in IFRS 13, a Level 3 fair value recognises that not all of the inputs and considerations made in determining the fair value of property investments can be derived from publicly available data, as the valuation methodology in respect of a property has also to rely on other factors including technical engineering reports, legal data and analysis, and on proprietary data bases maintained by the valuers in respect of similar properties to the assets being valued.

Valuations are performed on a bi-annual basis at each reporting date, being 31 December and 30 June each year.

Green REIT plc

Notes (continued)

7. Investment property (continued)

In consideration of the fair value of investment properties, the current use of the properties is their highest and best use.

Quantitative information about fair value measurements using unobservable inputs (level 3), per property class are as follows:

(i) Includes hotel and car park assets.

(ii) Includes the Central Park office portfolio, which is accounted for as a joint venture.

Green REIT plc

Notes (continued)

7. Investment property (continued)

Sensitivity of measurement to variance of significant unobservable inputs

A decrease in the estimated annual rent will decrease the fair value. Similarly, an increase in the discount rates and the capitalisation rates will decrease the fair value. There are interrelationships between these rates as they are partially determined by market rate conditions.

Across the entire portfolio of investment properties, a 1% increase in equivalent yield would have the impact of a €58.0 million reduction in fair value whilst a 1% decrease in yield would result in a fair value increase of €81.8 million. This is further analysed by property class, as follows:

(i) Includes the Central Park office portfolio, which is accounted for as a joint venture

Green REIT plc

Notes (continued)

8. Investment in joint venture

The Group, through its wholly owned subsidiary Green REIT (Central Park) Limited is a 50% partner in the Central Park Limited Partnership, a joint arrangement formed with LVS II CP Investor Ltd. On 28 March 2014, the Central Park Limited Partnership acquired a portfolio of commercial real estate known as Central Park, located in Dublin, for €229.5 million. Green Property REIT Ventures Limited acts as investment manager for the joint arrangement.

The total investment by Green REIT was €119.8 million inclusive of costs. LVS II SPE IV LLC, an entity sub-advised, advised or managed by Pacific Investment Management Company LLC or its affiliates, provided debt financing of €149.2 million to the Central Park Limited Partnership. On 20 June 2014, the Central Park Limited Partnership refinanced the secured debt provided by LVS II SPE IV LLC, an entity sub-advised, advised or managed by Pacific Investment Management Company LLC or its affiliates. Bank of Ireland, Corporate Banking, has provided a term loan of €150 million to the partnership. The Group's 50% share of this bank borrowing, net of arrangement fees, is €74.1 million.

The Group's 50% share of the Central Park Limited Partnership properties were externally valued by JLL at 30 June 2014 on the basis more fully outlined in note 7 to these financial statements.

The Group has classified this joint arrangement as a joint venture, as both parties have joint control of the arrangement. The detailed breakdown of the Group's 50% interest in the Central Park Limited Partnership joint venture is set out below:

(i) Summarised income statement

Green REIT plc

Notes (continued)

8. Investment in joint venture (continued)

(i) Summarised balance sheet

The Group's 50% interest in the movements on investment property above is as follows:

The Central Park Partnership loan of €150 million with Bank of Ireland ("BOI"), is at an interest rate of EURIBOR plus a margin of 3%. This loan is repayable in 2017 with an option to extend the terms of the loan for a further two years. Subsequent to 30 June 2014, the Central Park Limited Partnership, in which the Group has a 50% interest, purchased an interest rate cap, which covers the full extent of its bank debt (€150 million) for the 4 year term of the loan, at an interest cap of 2% EURIBOR.

The security over the loan includes a mortgage over the Central Park property, security assignment of all rental income of the property, a fixed and floating charge over all of the assets and undertakings of the Central Park Limited Partnership, charge over the Group's interest in the Central Park Limited Partnership and a charge over the Group's shareholding in Central Park GP Co Limited (legal title owner of Central Park property).

Green REIT plc

Notes (continued)

9. Receivables

Deposits paid

The Group has paid a deposit of €37.5 million in respect of contracts exchanged to acquire properties at George's Quay and George's Court in Dublin 2, and Westend Retail Park in Blanchardstown, Dublin 15. The deposit paid represents 10 per cent of the total contract price of €375 million. See note 21 for further details.

The Group's exposure to credit and market risks, and impairment losses related are disclosed in Note 16. The carrying value of all trade and other receivables approximates to their fair value.

10. Short term investments

The money market fund is invested in a diversified portfolio of money market instruments and short term bond securities. The fund also invests in repurchase agreements with high quality counterparties and may also hold up to 49% of its assets in cash and cash equivalents.

Until such time as the net proceeds received from investors are fully invested in real estate assets, any cash not invested is managed by the Cash Manager, BNP Paribas Investment Partners Limited ("BNP"). At 30 June, the Group had €351.6 million held in BNP Paribas Insticash EUR fund, a high quality investment grade money market fund, which is readily convertible to cash. While some of these money market investments had maturities of up to 12 months, the Group has the option to redeem its investment within 24 hours' notice at no penalty.

Green REIT plc

Notes (continued)

11. Share capital and share premium

Authorised and issued share capital

The Company has one class of shares referred to as Ordinary shares. All shares rank equally. The holders of Ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company.

On incorporation the issued share capital of the Company was €40,000 divided into 400,000 ordinary shares of €0.10 each. On 24 June 2013, the Company increased its authorised share capital to €100,000,000 divided into 1,000,000,000 ordinary shares of €0.10 each.

The Company subsequently issued 309,600,000 ordinary shares for €0.10 on 17 July 2013, raising total proceeds of €309.96 million before commission, other fees and expenses of €10.4 million. These costs have been netted against the share premium account.

Pursuant to a placing and open offer approved by shareholders on 1 May 2014, the Company issued 356,969,696 new ordinary shares at an issue price of €1.12 per new ordinary share, raising total proceeds of €399.8 million before commission, other fees and expenses of €14.8 million. Those costs have been netted against the share premium account.

Green REIT plc

Notes (continued)