The largest private residenital landlord in the country, Irish Residential Properties Reit (I-Res Reit), is considering expanding its presence outside of Dublin — to include areas such as Cork and Limerick — on the back of a year of strong revenue, profit, and rental income growth.
The listed property investment fund’s chief executive Margaret Sweeney said the company’s strategy of acquiring and developing “high-quality assets in attractive neighbourhoods with good transport links, and to deliver exceptional service which helps transform the residential rental sector in Ireland” is proving successful.
She was commenting on a strong set of annual results which saw I-Res Reit generate an 18.6% increase in net rental income to €36.3m and a 15.2% rise in revenue from investment properties to €44.7m. The company’s profit for the year rose by 38.5% to €65.1m and basic earnings per share grew from 11.3c to 15.6c.
Ms Sweeney said the company’s growth plans include continued accretive acquisitions, not solely focused on its Dublin heartland.
“As opportunities arise, I-Res will look at investments outside of Dublin, including in the other major urban centres such as Cork and Limerick,” said a company spokesperson, adding that the firm is continually evaluating new acquisition opportunities.
I-Res said it retains a positive outlook for the Irish residential market, with strong market demand continuing to move rental rates higher.
It said it will continue to invest in new housing supply through new development opportunities — including apartments, houses, development partnerships, and other types of accommodation for rental purposes. It said it had about €150m of spend capacity as of the end of December.
It is looking to add around 600 apartments to its portfolio and has lodged a revised application for 450 apartments in its Rockbrook development in south Dublin.
As of the end of last year, I-Res owned a total of 2,450 apartments in the Dublin area; up from 2,378 12 months previously. Its total occupancy rate increased marginally from 98.7% to 99.8%.
“The introduction of a 4% rent-review cap in 2016 has limited the ability for I-Res to close the reversionary gap across its portfolio over the course of 2017.
"However, efficient and effective property management has tightened costs, while sustained portfolio growth and impressive rent increases [up 6.3%] have delivered net rental growth of 18.6%,” said Goodbody analyst Colm Lauder.
While up by over 6% on the previous year, I-Res’ net asset value per share of 118.5c was slightly behind consensus expectations of 120c and Goodbody’s forecast of 119.3c, but headline net asset value of 120.8c was ahead of forecast.
“This is a modest growth rate versus the office Reits but symbolic of the lettings market. Revaluations and development profits drove net asset value [NAV], as values rose by €40.5m,” said Mr Lauder.
“I-Res’ NAV growth story may have been slow, but it is consistent and 2017 is a notable improvement on 2016. Valuation growth is a function of the Irish multi-family market, which remains highly regulated, while increasingly price competitive for investors,” he said.
Though marginally down, yesterday, I-Res Reit’s shares remain up by over 24% in the past 12 months.