Scale of institutional investors’ influence on the Irish housing marked is revealed in special report
Ireland’s 10 biggest private landlords own almost 17,000 houses and apartments between them.
An Irish Independent analysis today reveals the huge influence of institutional investors on the property market in Ireland. In less than a decade, these large investors have amassed tens of thousands of homes in Ireland, estimated to be close to €8bn.
The vast bulk of them have been accumulated in the Dublin area.
The investors from Ireland and abroad have been lured by a chronic shortage of housing here coupled with a young, skilled workforce that they believe will drive rental demand for years to come.
A top 10 list of institutional investors in Ireland’s housing market published today by the Irish Independent shows that they control thousands of apartments and houses, mainly in and around the capital, but also a smattering in Cork and Galway.
Ires Reit – Ireland’s biggest private landlord – has almost 4,000 units alone, but there is a raft of other investors who are pouring money into the housing market here.
The assets they own are mostly apartments and can often command high rents.
The developments are often in sought-after areas and some have gyms, private cinemas, and a pledge that any issues tenants have will be rapidly addressed.
The investors have either snapped up existing housing stock, struck deals with developers to buy it before it is built, or developed projects themselves.
The Irish Independent’s top 10 list does not include investors such as US property investment giant Hines, which will be catapulted into the top league of housing owners when major projects it is developing come on stream.
Last November, Hines was granted permission to construct almost 1,600 build-to-rent apartments at a €600m development on the grounds of Clonliffe College in Drumcondra, on Dublin’s northside.
Sinn Féin leader Mary Lou McDonald was among those who objected to the plan, claiming it would further exacerbate the housing crisis.
Last year, Hines also secured permission to build more than 700 residential units at the former Player Wills factory site on Dublin’s South Circular Road.
Neither does the list include others such as Roundhill Capital or Avestus which are also significant players in the private residential sector.
Irish players include Ires Reit, backed by Canada’s Capreit, which is listed on the stock market. Ardstone, Urbeo, the Comer Group are other Irish firms that have established a sizeable presence in the rental market.
But the Irish market has also lured money from the US, Germany and the Netherlands.
The investors are not typically out to make money quickly. They are often the likes of pension funds, seeking long-term, stable returns to address future liabilities they might have.
They may be seeking an investment that spans decades.
The Irish Independent’s top 10 list is based on publicly available data but is hampered by the often confidential nature of deals struck between investors and developers.
The investors themselves, by and large, prefer not to talk too much about what they do. Their firms will sometimes announce deals they have completed, but they are wary of the current public and political mood towards them.
The chief executive of Ires Reit, Margaret Sweeney, for example, declined to be interviewed for this feature.
If anything, the analysis completed by the Irish Independent is conservative.
If the swathes of developments that have not yet been completed are added, the valuation of existing and future housing stock controlled by investors is higher than the estimate of almost €8bn.
Our valuations are also often based on figures published at the time deals were done. That means that housing bought three years ago, for example, could potentially be worth much more now.
The investors have been the target of significant political ire. They are blamed for the housing crisis itself and spiralling rents.
They have been dubbed “cuckoo funds”, for preventing first-time buyers from being able to get a foot on the property ladder.
Yet, despite the narrative, the investors have contributed to housing stock even if a big chunk of it is directed towards people who have big salaries and can afford the luxury rental accommodation.
Others are also targeting social housing. Ardstone Capital, a company founded by former Friends First executives, recently raised €400m to build social and affordable homes in Ireland.
German investment manager Patrizia, injected €125m for the first scheme in that plan – nearly 300 apartments at Citywest in Dublin.