Ires Reit to appoint two Vision Capital directors to the board

Move is part of a truce between landlord and the activist investor

The board of Ires Reit, Ireland’s largest private landlord, has recommended that shareholders approve the appointment of two Vision Capital nominees as directors.

This is part of an agreement reached by the company with an activist shareholder in order to end a long-running row over its future direction. Vision had been demanding that Ires Reit be broken up or sell off its portfolio, which includes almost 4,000 apartments and houses.

The terms of the truce, agreed last month, led to Vision withdrawing resolutions it had tabled for inclusion at the Ires Reit AGM and undertaking to vote in favour of resolutions recommended by the board at general meetings over the next year. This does not include those concerning material transactions.

At yesterday’s more low-key AGM the board recommended the appointment of Richard Nesbitt and Amy Freedman, both Vision Capital nominees, as directors. Brian Fagan, the company’s CFO, did not seek re-election to the board.

Ires Reit reported that revenues were down 3.9pc in the first three months of the year. In a trading update ahead of the AGM, Ires said that the decline followed the impact of asset disposals in the second half of 2023. The proceeds from the disposals were used to repay higher-cost debt.

Occupancy levels rose to 99.5pc in the first quarter of 2024, up from 99.4pc at the end of 2023.

The Dublin-listed firm noted that there had been “exceptional” demand for rental accommodation in Ireland. Rental income margin in the first quarter remained in line with the same period last year, while rent collections were in excess of 99pc. The company’s loan-tovalue ratio rose to 44.7pc at the end of March, from 44.3pc at the end of last year. This increase was driven by the payment of the company’s final dividend in the period.

“We continue to believe the medium-term outlook for both the PRS [private rental sector] in Ireland and the Ires portfolio remains positive, underpinned by strong levels of demand which far outstrip supply,” Ires chief executive Eddie Byrne said.

The company is currently completing a strategic review. In a statement in January, the board announced that the review would consider a “full range of strategic options” to maximise value for shareholders.

These include consolidation, mergers, a review of the company as a listed Reit (real estate investment trust), the sale of the entire issued capital of the company and the sale of assets and returning value to shareholders.

“Whatever the strategic options may be, there’s still lots to be done in terms of more tactical initiatives, whether that’s building ancillary income, whether that’s recycling of capital, whether it’s sale of individual units,” chair Hugh Scott-Barrett said.

“These are all issues that are essentially part of an expanded business as usual and will certainly create value but may not necessarily be the end game in terms of strategic solutions.”

Last month, Ires Reit reported that an accelerated sale of the company’s portfolio would prove “challenging” in the short term due to current market conditions.

This included a sale to occupiers or to social providers, such as the government. It pointed to “historically low” levels of liquidity in European real estate assets, including in Ireland.

‘The company’s LTV ratio rose to 44.7pc at the end of March’