Apartment owner Ires Reit makes €47m profit as rents rise
Ireland's biggest residential landlord - property investment firm Irish Residential Properties (Ires) Reit - made a €47m profit last year, a 53pc increase on the amount it made in 2015.
Many of its tenants could be hit with rent increases this year.
The average monthly rent being charged by the firm for its thousands of properties, which are almost entirely fully let, was €1,427 last year compared to €1,372 in 2015.
That's a 4pc increase but, releasing preliminary full-year results yesterday, Ires Reit said that its so-called stabilised average monthly rents for residential properties owned by it had actually risen 8.6pc between December 2015 and December 2016. Its occupancy rate was 98.8pc at the end of last December.
Ires Reit, which is backed by Canada's Capreit, owns nearly 2,400 apartments and is planning to build more than 600. The company floated on the stock exchange in 2014 and is headed by chief executive David Ehrlich.
"I truly feel badly for the Irish people," Mr Ehrlich said last year in an interview when asked about rising rents here.
Yesterday, the company said: "Strong market demand and continued significant shortage of housing helps support the rental market", noting that rents can be hiked at a substantial number of its properties this year.
The company said that it enjoyed "strong rental growth" in 2016 because of renewals and tenant turnover.
"However, due to the rent legislation that came into effect on 4 December 2015, which allowed for rental increases every two years [instead of annually], a substantial portion of the portfolio is only up for rental increases on renewals in 2017," it added.
Yesterday, Mr Ehrlich said: "The objective of Ires since we commenced operations in Ireland has been to bring a new positive experience to tenants by providing a professionally-managed product which meets the needs of the market while adequately rewarding our shareholders.
"I believe we have delivered on both of these objectives to date.
"We are long-term investors in the Irish market and we are playing an increasingly positive role in helping to address the serious shortage of rental accommodation in Ireland."
Ires Reit said that its revenue from investment properties was €38.8m last year, compared to €24.7m in 2015. Its net rental income was €30.6m in 2016, a more than 50pc increase on the €20m it recorded in 2015.
The company is paying a total of €20.4m in dividends to shareholders in respect of the 2016 financial year.
The property investment firm acquired 763 apartments last year. It finalised a deal to buy 443 apartments in Tallaght, south Dublin, from Nama for €83m.
The firm also agreed to pay €59m to buy 201 apartments at Elm Park, beside St Vincent's Private Hospital in the capital. Elm Park was developed in 2006 by Bernard McNamara, Jerry O'Reilly and David Courtney.
Ires Reit said it has a "pipeline of future acquisitions to consider", taking into account the 4pc annual cap on rent increases imposed under new legislation, and "further development intensification opportunities".
It added that it has €150m available to fund both development and acquisitions, based on target gearing of 45pc.
Mr Ehrlich said yesterday that the firm will look at "accretive acquisitions".
The company has just been told by Dun Laoghaire-Rathdown County Council to resubmit plans for a proposed development of 492 apartments in Sandyford, south Dublin.
The council said that the existing proposal would be "overbearing and monolithic".