Could country’s biggest private landlord be put up for sale?

Ires Reit, the last surviving of four Irish real-estate investment trusts that floated in the past decade, may also be living on borrowed time, if a Canadian activist investor that shared its thoughts this week gets its way.

Vision Capital, the fourth-largest investor in the Republic’s largest private residential landlord, with a 5 per cent stake, said in an open letter to other shareholders on Wednesday that Ires should become a private company “with a different corporate and capital structure”.

“The Irish Reit market never flourished as it was hoped it would when legislation was passed in 2013 and has, to the contrary, contracted with the privatisation of Green Reit and Hibernia Reit, as well as the sale of Yew Grove Reit,” Vision Capital said.

The investment manager said it planned to vote at Ires’s annual general meeting next month against the re-election of four directors, including executive chair Declan Moylan and chief financial officer Brian Fagan, arguing that the company had ignored its pleas – voiced behind closed doors until now – to put itself up for sale.

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Goodbody Stockbrokers analyst Colm Lauder said in a note to clients on Friday that Ires, with almost 4,000 homes on its books, may be operating in an undersupplied market and has almost zero vacancies. But it is caught by rent controls and rising debt costs, which resulted in dividends falling last year.

Rising interest rates have also resulted in a dip in its asset values last year, contributing to its net debt rising marginally to 43.6 per cent of assets – compared with a 50 per cent loan-to-value limit set by Irish Reit laws.

“These are issues facing many Irish residential investors, which are now impacting critical new supply,” he said, noting that net asset value-growth story is on pause for now.

Having hit an all-time low last week, shares in Ires rallied almost 10 per cent this week on foot of Vision Capital’s intervention, to give the company a market value of €539 million.

Still, the market is not attaching high odds on Ires attracting a suitor, for now. The stock is continuing to change hands at almost a 40 per cent discount to the value the company puts on its assets.