Ires Reit to sell off €50m in assets after buoyant first half

Nation's top landlord takes €27m revaluation hit in results

Ires chief executive Margaret Sweeney. Photo: Naoise Culhane Photography

Ellie Donnelly Twitter Email

August 08 2020 02:30 AM

Ires Reit is to sell more than 150 apartments after seeing a 30pc jump in its rental income in the first half of this year, despite the Covid crisis.

It's understood Ireland's biggest landlord expects to net €50m from the sale of units at nine properties in Dublin 8, Sandyford, the IFSC and Tallaght, as well as three commercial units and a development site.

The company said that a revaluation of its assets, especially in development land values and commercial units by 2pc, meant that it reported a €10.8m loss in the first six months of the year.

That revaluation resulted in a €27m hit.

Ires Reit also cautioned that it expects to collect less short-term rent. Occupancy of its residential units currently stands at 98.9pc, while monthly rent collections have "remained resilient" at 98.4pc since the arrival here of Covid-19, it said.

Goodbody analyst Colm Lauder described the firm's first half results as "mixed".

"The continued strong rent collection performance and healthy levels of occupancy highlight the resilience of the Irish private rental sector from an income standpoint," he said. "However, we are surprised by the extent of the valuation markdown given the wider level of stability in the market."

Ires saw its rental income jump 30pc in the first six months of this year to €29.6m, reflecting the 35pc growth in the size of its residential property portfolio from a year ago.

The group's net rental margin, which is the share of rent kept after absorbing costs such as maintenance, remained strong at 79.2pc, although it was slightly lower than in the same period a year ago.

Ires cited higher bad debt and vacancy expenses, driven mainly by Covid-19 disruption, as the key reasons for the slippage.

Ires Reit's apartment blocks range from the super high-end Marker apartments at Grand Canal Square in the Dublin docks and the Elm Park development close to RTÉ in Dublin 4, to modern developments in Tallaght, Finglas and Inchicore.

Many of the 151 apartments for sale were acquired as part of the Marathon Asset Management portfolio that Ires bought last year for €285m.

Ires chief executive Margaret Sweeney said the results "demonstrate the strong resilience of the business".

"Looking forward, while social and economic uncertainty is likely to continue due to Covid-19, I believe the ongoing supply constraints and resilient demand drivers for housing in Ireland will underpin the performance of the company for the remainder of the financial year and beyond," she said.