Rental crisis: profits double for country’s top landlord
THE housing crisis is paying off for the country’s biggest private landlord as it more than doubled its profits in the first half of the year to €69.5m.
Irish Residential Properties REIT (I-RES Reit) says it had 2,600 rental properties as of June 30, with an occupancy rate of 98.7pc. The firm owns blocks of new build apartments across Dublin city. Average monthly rents charged are €1,539.
A real estate investment trust –REIT for short – is a stock market company set up to invest in property. REITs get very special tax treatment as they are not liable to corporate tax on income and capital gains arising from the property rental business.
Shares in I-RES Reit rose almost 3pc on the Irish Stock Exchange yesterday. The firm buys and builds apartments for the rental market.
PROFITS at Ireland’s biggest private landlord, I-RES Reit, more than doubled to €69.5m in the first six months of the year.
The stock-market listed company said it had 2,600 rental properties as of June 30, with an occupancy rate of 98.7pc. The firm owns blocks of new-build apartments across Dublin city.
Average monthly rents charged are €1,539.
Shares in Irish Residential Properties Re rose almost 3pc on the Irish Stock Exchange yesterday. The firm is one of a new class of industrial-scale landlords that have emerged in the aftermath of the crash – buying and building large portfolios of rental stock.
The sharp rise in profits was driven by a 13pc increase in net rental income to €19.3m, according to interim results from the group. That was driven by the growth in the number of units controlled – average rents were up 1.5pc from last year.
Rising rents and the wellknown lack of housing supply are creating a combination of “attractive yields and rental growth for the company,” chief executive Margaret Sweeney said.
“I-RES has delivered another strong set of results for the six months period, achieving excellent operating metrics, underpinned by active property management and asset management, as well as further portfolio valuation uplift,” Ms Sweeney said.
Critics argue that large-scale landlords are among the factors driving up rents in the capital in particular – which are now well in excess of boom levels. Supporters say investment by I-RES and its peers means more housing stock is becoming available.
“We continue to invest in the supply of apartments and houses for rent through a combination of acquisitions and build-to-let,” Ms Sweeney said.
In what will be seen as bad news for renters, prospects for growth in the Irish market remain good, she said.
The structural drivers of demand for private rental accommodation – population growth, strong inward investment and economic growth and urbanisation – are likely to underpin demand “for some time to come”.
“This, coupled with our modern well located existing asset portfolio and our current development opportunities, offer significant opportunities for future growth,” she said.
In May I-RES completed its latest €40m acquisition of 128 apartments at Hampton Wood in Finglas, Dublin.
Since its flotation on the Irish Stock Exchange in April 2014, I-RES Reit has grown to become Ireland’s largest private residential landlord with 2,450 apartments spread across 20 Dublin developments.
Its stock of apartments, and increasingly houses, includes a cross section of Dublin neighbourhoods ranging from Sandyford, to Tallaght, Finglas, and Elmpark on the Merrion Road.
Many of the schemes it bought were begun and abandoned before the 2008 crash, and restarted as large amounts of cash became available again in the past four years.
While rising rents are a boon to investors, they’ve hit renters hard, and are increasingly a cause of concern for other businesses. In its pre-budget submission to government yesterday, the American Chamber, a business group representing large US multinationals, warned that lack of access to residential accommodation should be a strategic priority area to keep business competitive.