IRES results miss as new rent laws start to bite
SHARES in the biggest residential landlord in the country fell on Tuesday as the Government's new rent controls began to hit profits.
IRES REIT said its net asset value - the key measure for the financial health of property funds - came in at 104.3 cents per share at the end of 2015.
That was well behind analysts' expectations, which had been closer to 107 cents per share.
Goodbody's Colm Foley said results were "a disappointing set of numbers and the rent control measures are clearly having an impact on valuations".
He added that Goodbody will likely revise down its forecasts for the company in the future.
IRES chief executive David Erhlich admitted that the Government's "rent certainty" measures, which include freezing rents for two years could have an impact on the company's "bottom line growth" but added that he believed the issue "will be a timing matter as rents continue to grow".
Overall, IRES said it posted a total return on its portfolio of 15.3pc for the year. In turn, it saw profits jump more than four fold to €30.8m.
Since the end of the year, IRES has acquired more than 400 other apartments and on Tuesday said it had begun development of 68 new apartments at Beacon South Quarter in south Dublin.
The firm has about €230m to spend on acquisitions and it said there is still a "significant pipeline" of new properties for sale from Nama among others.
Even with the weak numbers yesterday, IRES remains confident for the future.
It highlighted the lack of new apartments being built and said the squeeze on supply is likely to continue.
Meanwhile Hibernia REIT is selling off another 11 units of the so-called "non-core" portion of a portfolio it bought two years ago tied to developer Dorville Homes.
In a trading update, Hibernia said it had agreed terms to sell the units for €3.2m. That is 17pc more than what it paid for them originally.
Hibernia has already sold off 22 units from the portfolio for €6.9m. It is also expected to sell the remaining parts of the portfolio that are surplus to requirements. That would mean selling another 13 units.
Hibernia boss Kevin Nowlan said his firm was "seeing a high level of interest in our buildings from potential tenants and we have flexible funding in place to pursue selective investment opportunities". IRES shares fell 1.75pc to €1.07, Hibernia jumped 5pc to €1.24.