Commercial Property

Ires Reit shareholders in line for increased dividends – Investec

Profits at Irish real estate company more than doubled during the first half of 2018

Ires Reit owns and lets 102 apartments at The Marker in Dublin’s docklands. Photograph: Cyril Byrne

Tue Aug 21 2018 - 09:25

Shareholders in Irish real estate group Ires Reit, the State's largest private landlord, are in line for a "material expansion" in dividends, according to a note from stockbroker Investec.

According to Investec, “portfolio additions and continued underlying rent inflation” should facilitate the boost in dividend payments at Ires, which is listed in Dublin.

The brokerage predicted that Ires’s dividend per share would increase at a compound annual growth rate of 7.6 per cent over the next five years. “Helped by development surpluses and ongoing yield tightening in the inplace portfolio, we estimate that net asset value (NAV) will grow to €1.75 per share by end full year 2023 from €1.33 at end June,” Investec said.

Profits at Ires Reit more than doubled during the first half of 2018, according to the company’s latest results.

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The group enjoyed a 13 per cent increase in net rental income to €19.3 million, up from €17.1 million last year.

‘Hidden value’

Investec said the company’s recent results revealed an impressive underlying performance, while a material upward revision to the book value of Ires’s property assets had “helped to resolve some of the ‘hidden value’ we have previously written about”.

“The company has a menu of growth options – buy, build and/or forward fund,” Investec said.

Helped by its strong balance sheet, we see the portfolio increasing by 28 per cent between now and 2021, driving higher dividends,” it added.

As at June 30th, Ires had invested about €683 million (including VAT and other transaction costs) in 2,608 apartments across 22 locations in the Dublin area, funded through a combination of equity and debt.

In addition, it has adjoining development sites that it is progressing through planning stages. The group achieved residential occupancy levels of 98.7 per cent in the first half of the year.

The company is led by chief executive Margaret Sweeney.

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