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Sunday 21 September 2014

Canada-backed IRES Reit boosts buying power by €130m

Published 19/08/2014 | 02:30

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Camac Crescent, Inchicore
The Marker apartments
Kingscourt, Smithfield

Irish Residential Properties (IRES) Reit has become the latest listed fund to secure a major property loan, a sign banks are piling back into the Irish commercial property market.

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In an announcement to the market IRES said it had sectured a €130m loan from Barclays.

Last week the rival Hibernia Reit raised €100m from Bank of Ireland in its first major debt financing.

Real estate investment trusts (Reits) are tax-efficient vehicles used to raise cash on the stock market to buy property. Since the first Irish Reit hit the market last year more than €1bn has been raised from investors, mainly outside Ireland, to buy assets here.

IRES raised €200m in equity in April when it was floated on the Irish Stock Exchange. It is the first Reit here focused exclusively on buying residential properties. IRES Reitwas set up by Canada's Capreit, one of that country's biggest residential landlord's with an interest in 41,429 residential units.

In Ireland, it has said it wants to build up a portfolio of 2,300 houses and apartments, which it will manage and let.

Earlier in the summer the fund agreed to buy the high end Marker Residences in Dublin's Grand Canal Dock area for €50.1m. Capreit also owns the Kings Court apartment block in Smithfield in Dublin city and blocks in Tallaght and at Sandyford that it bought before listing the standalone Irish venture. The loan from Barclays boosts its fire power for new acquisitions.

Bank loans are now being used to boost that capacity.

The new IRES loan is secured against the company's assets.

"We are very proud that our lenders have shown confidence in IRES Reit and extended a credit facility which allows the Reit to grow and achieve its investment goals," said David Ehrlich, chief executive officer of IRES Reit.

The biggest shareholder in IRES is Franklin Resources with 17.9pc. It is part of US investment house Franklin Templeton, best known here for making a massive and successful bet on Ireland during the euro crisis by investing heavily in Irish government bonds. Capreit, with a 17pc stake, is the next biggest shareholder.

Last week Hibernia Reit said it had entered into a €100m three-year revolving credit facility with Bank of Ireland.

Shares in IRES Reit were down slightly at €1.0350 each yesterday. The fund has a market capitalisation of just under €210m. In December Hibernia Reit raised €365m when it launched on the ISE while Green REIT raised more than €300m last July.

Irish Independent

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