YEW.L Regulatory News (YEW)

Yew Grove REIT plc

("Yew Grove REIT", the "Company" or the "Group")

Results for the period ended 31 December 2018

Yew Grove REIT plc (LSE:YEW, Euronext Growth:YEW), an Irish commercial property REIT which started trading on both Euronext Growth Dublin and London Stock Exchange (AIM) on 8 June 2018, is today reporting its unaudited consolidated results for the period from incorporation on 5 April 2018 to 31 December 2018 ("the Period").

Financial Highlights

• EPRA Net Asset Value ("NAV") per ordinary share (pre-dividend payment) increased by 3.6 cents to 100.18 cents as at 31 December 2018

• The Company's properties benefit from attractive leases:

• Current weighted average unexpired lease terms of 4.9 years to break and 7.4 years to expiry

• Very strong occupancy of 96.5% across the estate

• Strong tenant covenants with 38.7% Government and other State Bodies tenants, 58.7% FDI / Corporate tenants by income)

• yield of 8.07% at year end valuations with an estimated gross reversionary yield exceeding 8.7%

• Annualised passing rent roll of €6.3 million as of 31st December 2018

• Uncommitted headroom under the Group's €19.9 million debt facility of €13.7 million as at 31 December 2018.

Strategic Highlights

• IPO in June 2018 raising gross proceeds of €75 million.

• Full deployment of the IPO proceeds

§ €25.9 million in the seed portfolio acquired at admission; and

§ a further €50.4 million on the acquisition of 6 new buildings

• A three-year, revolving credit facility with an initial total amount of €19.95 million has been signed with AIB Group plc.

• Positive Irish commercial real estate market supporting the strength of the Company's potential acquisition pipeline.

In line with previous guidance, and taking account of the assets currently owned by the Company and its available capital, the Board proposes an interim dividend in respect of the Period of 0.964 cents* per share, this amount being covered by the Group's income for the Period. The payment date for this proposed dividend will be confirmed in a separate announcement after the Initial Financial Statements have been filed with Companies Registration Office ("CRO") in Ireland later today.

Jonathan Laredo, Chief Executive Officer, commented:

"We are delighted to announce that by the end of the year the Company had invested all of the net proceeds raised in our IPO. We are even more pleased that EPRA NAV per share increased to 100.18c from 96.55c at the date of the interim results. The fact that this was achieved despite the Company absorbing all of the costs of flotation and tripling the size of its property portfolio is a testament to the quality of those purchases.

"The headroom under our revolving credit facility will allow the Company to buy further attractive properties and continue to improve returns to shareholders. The current strong rental levels in our geographic target market support a growing dividend and, as previously disclosed, the Company will announce its first quarterly dividend at the end of March.

"Yew Grove REIT is the only Irish REIT investing predominantly in commercial office and industrial properties outside of the Dublin central business district. This area of the market continues to combine attractive purchase yields and rising rent levels. These trends align with Yew Grove REIT's differentiated strategy, targeting well tenanted commercial real estate located outside of central Dublin and I look forward with a high degree of optimism to our first full year of active operations."

Note:

*As a result of the share premium account reduction announced on 2 November, 2018 and subject to the filing of the Company's initial financial statements for the period to 31st December, 2018 an interim dividend of 0.964 cents per share is proposed.. A further announcement will be made once the filing has been confirmed.

Enquiries:

Notes to editors:

Yew Grove REIT is an Irish commercial real estate company invested in a diversified portfolio of Irish commercial property, with a particular focus on well-tenanted commercial real estate assets comprising office and industrial assets let to Irish government entities and other state bodies, IDA Ireland supported and other FDI companies, and larger corporates.

CEO Statement

I am pleased to announce a strong set of inaugural results for the Group for the period ended 31st December 2018 for the seven-month period of trading activity since incorporation.

The net proceeds from the IPO have now been fully invested and the properties that have been acquired have enhanced the rent roll and tenancy mix of the overall portfolio.

Results

Pre-tax profits for the period were €2.3 million including a net valuation gain of over €1.6million. The valuation gain was partially driven by growth in value of the seed portfolio, but more substantially by the increase in value of properties acquired since the IPO in June 2018. The Company has tripled the size of its property portfolio since IPO, and the valuation gain recorded for the period represents a significant achievement given the market assumption that Irish commercial property investments have an associated cost (including stamp duty, legal, surveying and other fees) of 8.46%.

As a result, EPRA NAV per share increased to 100.18c as at 31st December 2018, from 96.55c in June 2018. This means that, not only has the Company covered the acquisition costs of the new properties, but also the costs of flotation. This is a remarkable achievement. for a company in its first seven months of activity.

The agreement of a revolving credit facility with Allied Irish Banks plc ("AIB") has increased the Company's funds available for investment and will allow us to pursue some attractive opportunities in the near term.

The annualised rent roll as at 31st December 2018 was €6.3 million with excellent opportunities to increase that on the existing portfolio both through asset management as well as generally increasing rental levels driven by the backdrop of strong demand from tenants in our geographic target market.

Dividend

I am pleased that, as disclosed during the year, the Board have agreed to pay an interim dividend in respect of the period to 31st December. The proposed dividend is the Group net income, which rounds to 0.97 cents per share.

Again, as disclosed during 2018, the Company intends to pay quarterly dividends in 2019 and expects to announce the first quarterly dividend at the end of March.

Review of activity

In the period from our April incorporation to year end, we successfully completed a €75M IPO in June and have grown our portfolio to 18 buildings in 14 properties. This includes 12 buildings in the 10 seed portfolio properties acquired at IPO.

In July, the Group acquired two office buildings (Building One and Three Gateway, together the "Gateway buildings") on East Wall Road, Dublin 3, just north of the Dublin docklands. The two buildings were acquired for €29m (plus costs). In October, the Group acquired Blackwater House in Mallow for €1.85 million (plus costs). In November, the Group agreed terms with IDA Ireland and a tenant in its Athlone property to acquire land and begin construction of a car park adjacent to that property. That work which will cost c €0.5 million is expected to be completed in February. In December, the Group completed the acquisition of three buildings, on an IDA park outside Letterkenny in Donegal, for an aggregate purchase price of €16 million (plus costs). The costs are detailed in note 13 to the accounts below.

In November, the Company was granted permission by the Courts to write down its share premium account and as a result when the Company accounts for the period ended 31st December are filed with the CRO, the Board will be able to announce the payment of the interim dividend.

Finally, in December, the Company agreed a revolving Credit facility with AIB secured on some of its properties. The facility has a three-year initial term and has an initial principal amount of €19.95 million. At year end the Group had uncommitted facilities of €13.7 million and continues to pursue a number of attractive investment opportunities.

Property valuation

Lisney valued the property portfolio at 31st December 2018 including the initial valuation of all properties acquired since the IPO. The portfolio was valued at €77.9 million recognising a valuation gain of €1.6 million.

As at 31st December 2018, the portfolio had an annualised rent roll of €6.28 million representing a yield to the Company of 8.07%. The expected reversionary yield on the portfolio is in excess of 8.7%.

The portfolio has a WAULT of 4.9 years to break and 7.4 years to final maturity. Given the current state of the market, i.e. that demand for property in our geographic target market is driving rent levels up, the Company is currently happy with a slightly shorter WAULT to break/rent review where it can increase rental earnings more quickly.

Finance

Borrowings at 31st December stood at €6.2 million with further available facility of €13.7 million. Total Debt to equity gearing and LTV at 31st December were 7.96% and 8.26% respectively. Details of the facility and the amount drawn can be seen at note 19to the accounts below.

Irish Commercial Real Estate Market

The strength and depth of the Company's potential acquisition pipeline is a reflection of the positive Irish commercial real estate market, as well as its first mover advantage as the only publicly quoted vehicle focusing predominantly outside of the- Dublin CBD. The Irish economy has performed strongly in recent years and this has been reflected in the volume of property investment transactions. 2018 was one of the strongest years on record with total transactions of €2.56 billion in the first 9 months of 2018. Of this €1.1 billion was in the office sector. More significantly for the Company, approximately 63% of those transactions happened outside of the Dublin CBD1, i.e. within the Company's geographic target market. The prognosis for the economy remains positive despite underlying concerns relating to Brexit and other macro-economic headwinds.

On current trends, demand for office space is increasingly being driven by the requirement from multinationals for large footplate, grade A or modern space. In addition the Irish Government has a proactive policy focused on balanced regional development which is encouraging the growth of regional centres. With current rent rates for prime space outside of the CBD at half of the CBD levels or lower, multinationals and other tenants attracted by suitable space are driving demand and falling vacancy rates. For the past 3 years take up has been stronger in Dublin's secondary and suburban areas than the CBD, and in 2018 vacancy rates in those locations fell, whilst vacancy increased in the CBD (principally in older, poorer quality buildings). Vacancy rates have fallen in Cork, Limerick, Galway and the other key cities and towns in which large corporate FDI companies are increasingly looking to site their businesses. Rising rents have seen the beginnings of development outside of the CBD, with over half a million sq feet under construction2.

Transactions in industrial property are far more constrained as a severe shortage of suitable properties makes secondary transactions expensive and fairly infrequent. The market accounted for only 3% of all commercial real estate investment transactions in the first 3 quarters of 20183. However, the demand for space is driving rents upwards and there are increasing numbers of forward funded development for tenants. The Company expects to see that continue in 2019 and beyond.

These trends align with Yew Grove REIT's differentiated strategy, targeting well-tenanted commercial real estate located outside of central Dublin and I and the Board look forward with a high degree of optimism to our first full year of active operations.

On behalf of the Board

_________________ _________________

Charles Peach Jonathan Laredo

Chief Financial Officer Chief Executive Officer

_________________

Barry O'Dowd

Chairman

____________

1 Source Cushman and Wakefield

2 Source Cushman and Wakefield

3 Source Cushman and Wakefield

Unaudited Consolidated Statement of Comprehensive Income

For the financial period from 5 April 2018 (date of incorporation) to 31 December 2018

Period ended

31 December 2018

(unaudited)

Unaudited Consolidated Statement of Financial Position

As at 31 December 2018

Unaudited Consolidated Statement of Changes in Equity

For the financial period from 5 April 2018 (date of incorporation) to 31 December 2018

Unaudited Consolidated Statement of Cash Flow

For the financial period from 5 April 2018 (date of incorporation) to 31 December 2018

(1) On 8 June 2018 all of the Yew Tree Investment Fund plc (in Member Voluntary Liquidation) Class A shares were redeemed. The issue of ordinary share capital above is net of Class A shareholders who on redemption subscribed for ordinary share capital in the Company.

(2) Issue costs represent the gross costs of issuing ordinary share capital for the financial period. The net issue costs for the financial period are stated after the deduction of a cost contribution by the Class A shareholders of Yew Tree Investment Fund plc (in Member Voluntary Liquidation) to the issue costs of Yew Grove REIT plc.

(3) On 8 June 2018 the Company subscribed for 23,064,484 of the €1 B ordinary share capital in Yew Tree Investment Fund plc (in Member Voluntary Liquidation) for €23,064,484 as consideration for the Fund's net assets. At the same time the Company subscribed for a further 8,329,422 €1 B ordinary shares for €8,329,422, the €8,329,422 proceeds were used to fully repay the Yew Tree Investment Fund's outstanding loan following acquisition.

Notes to the Unaudited Consolidated Financial Statements

For the financial period from 5 April 2018 (date of incorporation) to 31 December 2018

1. Accounting policies

1.1 General information

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

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

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

1.2 Trading period

The unaudited Consolidated financial statements for the Group shown herein are from 5 April 2018 (date of incorporation) to 31 December 2018.

The results are inclusive of the parent company (Yew Grove REIT plc) and its subsidiary company the Yew Tree Investment Fund plc (in Member Voluntary Liquidation) and other entities controlled by the Company as disclosed in note 1.13 for the financial period from 5 April 2018 (date of incorporation) to 31 December 2018.

1.3 Going concern

The Company raised €75m, excluding issue costs, from an equity placement on 8 June 2018 and deployed the majority of these funds through: (i) subscription for the entire share capital of the Yew Tree Investment Fund plc (in Members Voluntary Liquidation) on 8 June 2018 and (ii) direct purchase of Irish commercial property. The Company's funds were employed to generate stable income streams from majority tenanted Irish commercial properties (primarily office and industrial property) that have the potential for income and capital appreciation. As at 31 December 2018 the Company held €4.36m in cash that had not been invested in or committed to acquire property.

Based on financial projections which extend beyond twelve months from the date of this report, the Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors have concluded that they should prepare the unaudited Consolidated financial statements on a going concern basis.

1.4 Basis of preparation

The unaudited Consolidated financial statements of the Group for the financial period 5 April 2018 (date of incorporation) to 31 December 2018 have been prepared in accordance with the Alternative Investments Market ("AIM") rules of the London Stock Exchange and the Euronext Growth Dublin rules of Euronext Dublin and with International Financial Reporting Standards ("IFRS"), as adopted by the European Union ("EU") and the Companies Act 2014.

The unaudited Consolidated financial statements have been prepared on the historical cost basis, except for the revaluation of investment properties that are measured at fair value at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

The unaudited Consolidated financial statements are presented in Euro, which is the Company's functional currency and the Group's presentational currency.

Unaudited Financial Statements

The results for the period 5 April 2018 (date of incorporation) to 31 December 2018 are unaudited and constitute non-statutory accounts within the meaning of the Companies Act 2014.

2. Revenue

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

3. Property expenses

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

4. Fair value gains on investment properties

5. AIFM Fees

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

6. Impairment of Goodwill (continued)

Goodwill arising on the acquisition of the Yew Tree Investment Fund plc (in Members' Voluntary Liquidation) and Gateway Estate Management Company has been assessed for impairment at the period end date resulting in a net charge to the Unaudited Consolidated Statement of Comprehensive Income of €180,011.

The carrying value of the Goodwill at the Statement of Financial Position date was nil.

7. Finance costs

The effective interest expense on borrowings arises as a result of the recognition of interest expense, commitment fees and arrangement fees.

8. Administration expenses

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

Staff costs represents total remuneration and other benefits paid to all employees for the financial period.

Capital reduction costs relate to the Company's application to the Court to reduce the amount standing to the credit of the Company's share premium account by the sum of €70,250,000. The Company's application to the Court was approved on 1 November 2018. Refer to note 21 for further details

8. Administration expenses (continued)

Auditor's remuneration

Other assurance services include fees paid in respect to the role of reporting accountant at Admission to trading on AIM and Euronext Growth and review of the Interim Report and Condensed Financial Statements.

9. Employment

The Company had no employees prior to Admission (8 June 2018). The average monthly number of employees (including Directors) directly employed during the period from incorporation to period end (5 April 2018 to 31 December 2018) in the Group was 7.

Total employees at financial period end:

The staff costs for the above employees were:

Staff costs are allocated to administration expenses during the financial period.

10. Income tax

Current tax: current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Yew Grove REIT plc has elected for Real Estate Investment Trust ("REIT") status under section 705E Tax Consolidation Act 1997. As a result, the Group does not pay Irish corporation tax on the profits and gains from its qualifying rental business in Ireland provided it meets certain conditions. With certain exceptions, corporation tax is still payable in the normal way in respect of income and gains from a Group's Residual Business that is its non-property rental business.

Reconciliation of the income tax expense for the financial period

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

11. Earnings per share

Adjusted earnings per share

The adjusted basic and diluted earnings per ordinary share of 3.11 cents per share is based on the profit for the financial period of €2,333,879 and on 75,000,000 ordinary shares, being the average number of shares in issue since admission.

12. IFRS and EPRA NAV per share

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

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

13. Investment properties

During the financial period the Company acquired 100% of the B ordinary shares in the Yew Tree Investment Fund (in Members Voluntary Liquidation). By this acquisition the Company secured 10 properties with a fair value as at 30 June 2018 of €25,910,000. The Company has since received all the properties and the majority of the cash from the Yew Tree Investment Fund (in Members Voluntary Liquidation) through distribution in specie following the Members Voluntary Liquidation of the Fund.

The Company also acquired the One and Three Gateway, East Wall Road, Dublin 3 buildings during the financial period for €31,001,082, the Blackwater House, Mallow Business Park, Mallow, Co. Cork building for €2,010,008 and Buildings 1, 2 and 3, Letterkenny Business Park, Co. Donegal for €17,136,521, all inclusive of transaction costs.

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

The Directors are satisfied that the valuation of the Company's properties is appropriate for inclusion in the accounts. The fair value of the Company's properties owned at 31 December 2018 is based on the valuation provided by the external independent Valuers, Lisney. This valuation is prepared on the basis of market value in accordance with the Royal Institution of Chartered Surveyors Valuation - Global Standards (June 2017) and the principles of IFRS 13. This valuation has not been adjusted by the directors in making their determination of fair value of investment properties at 31 December 2018.

13. Investment properties (continued)

Fair value

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

The main inputs for property valuation using a market-based capitalisation approach are the ERV ("Estimated Rental Value") and equivalent yield. ERV is a valuer's opinion as to the open market rental value of a property on a valuation date which could reasonably be expected to be the achievable rent for a new letting of that property on the valuation date. ERVs are not generally directly observable and therefore classified as Level 3 inputs. Equivalent yields depend on the valuer's assessment of market capitalisation rates and are therefore Level 3 inputs.

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

Sensitivity of measurement to variance of significant unobservable inputs

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

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

Across the entire portfolio of investment properties, a 0.25% increase in equivalent yield would have the impact of a €3.00m reduction in fair value whilst a 0.25% decrease in yield would result in a fair value increase of €3.19m, and a 5% increase in ERV would have the impact of a €3.28m increase in fair value whilst a 5% decrease in ERV would result in a fair value decrease of €3.29m.

14. Investments in joint ventures

Details of the Group's only material joint venture at the end of the reporting period were as follows:

This joint venture is accounted for using the equity method in these unaudited Consolidated financial statements as set out in the Group's accounting policies in note 1.

Summarised financial information in respect of the Group's joint venture is set out below. This represents amounts in the joint venture's financial statements prepared in accordance with IFRS Standards (adjusted by the Group for equity accounting purposes).

The Group acquired its interest in the joint venture when it acquired the entire class B ordinary share capital of the Yew Tree Investment Fund on 8 June 2018. The share of profits attributable to the Group are from 8 June 2018 to 31 December 2018.

15. Cash and cash equivalents

The management of cash and cash equivalents is discussed in detail in note 26.

16. Trade and other receivables

Trade receivables include amounts due from tenants for rental and service charges. The balance of trade and other receivables has no concentration of credit risk as it covers mainly prepayments. The directors therefore consider the carrying value of trade and other receivables approximates to their fair value.

17. Trade and other payables

Trade payables includes amounts due to third party suppliers and prepaid rent amounts received from tenants in advance. Accrued expenses include operational expenses incurred but not yet invoiced to the Group as at 31 December 2018. Trade and other payables are interest free and have settlement dates within one year. The Directors consider that the carrying value of the trade and other payables approximates to their fair value.

18. Borrowings

The Group has a revolving credit facility with Allied Irish Bank plc ("AIB"), secured by fixed and floating charges over certain property assets. The facility is €19,954,000 and can be repaid and re-drawn without penalty throughout its 3 years expected life. The facility was partially drawn once, the amount of drawing remained the same to period end. This facility was measured initially at fair value, after transaction costs, and carried at amortised cost, with all attributable costs charged to Unaudited Consolidated Statement of Comprehensive Income over the life of the facility.

The loan facility was partially drawn down in December 2018 and there were no loan repayments during the period to 31 December 2018. Total interest accrued at the period end was €11,837. No interest was paid during the financial period.

The Company stated in its Admission document its intention to target borrowings, following full investment of the net proceeds raised at Admission, of 25% loan-to-value ("LTV"). LTV is the ratio of drawn debt to the value of property investments, which at 31 December 2018 was 7.95%. Under the Irish REIT rules the REIT's borrowings must not exceed 50% of the value of its assets.

Where debt is drawn to finance material refurbishments and developments on qualifying assets, the borrowing cost associated with this debt is capitalised. No amounts were capitalised during the financial period for this purpose. All costs related to finance arrangements are amortised using the effective interest rate.

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

The Company has authorised and issued share capital of 75m Ordinary Shares.

* share capital as at 31 December 2018 was fully paid. There is one class of ordinary shares of one cent each.

20. Reserves

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

On 1 November 2018 the High Court of Ireland made an Order confirming the Company's capital reduction resolution for the reduction of the Company's Share Premium Account in the sum of €70,250,000 such that the balance remaining credited to that account will be €4,000,000 such that the reserve resulting from such cancellation be treated as realised profits as defined by Section 117 of the Companies Act 2014. The Order of Court and Minute on reduction of share premium account was registered on the 2 November 2018.

 21. Operating leases receivables

Future aggregate minimum rental receivables (to the next break date) under non-cancellable operating leases and licences are:

The Group has both operating leases and operating licences. The operating licences are predominantly for car parking spaces and are less than one year in duration.

The Group leases its investment properties under operating leases. The weighted average unexpired lease term of these leases ("WAULT") at 31 December 2018 is 7.4 years.

These calculations are based on all lease and licences outstanding at 31 December 2018.

22. Capital management

The Group's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain the future development of the business. The key performance indicators used in evaluating the achievement of strategic objectives are return on capital, growth in NAV and dividends to ordinary shareholders (dividend per share) as well as the total return of the Group's property portfolio.

Capital consists of share capital, reserves and retained earnings. At 31 December 2018, the equity of the Group was €75.13m.

The Group seeks to leverage capital in order to enhance returns. Refer to note 19 for more details.

23. Contingent Liabilities

The Group has not identified any contingent liabilities which are required to be disclosed in the financial statements.

24. Events after the reporting period

 There were no significant events affecting the Group after the reporting date.

25. Capital commitments

At the Statement of Financial Position, the Group has entered contracts for future capital expenditure of amounting to €236,671 in respect of the development of the car park space at one of its investment properties.