Ires Reit to build 600 apartments despite political uncertainty

State’s biggest landlord to press ahead in absence of clarity on next government

Ires Reit earned a profit last year of €86.3m

Ires Reit earned a profit last year of €86.3m

 

The State’s biggest landlord will press ahead with plans to build almost 600 apartments despite fears that a new government could freeze rents, its chief executive says.

Irish Residential Properties Real Estate Investment Trust (Ires Reit) collected €62 million in rent from tenants in its 3,666 apartments in the Republic last year.

Margaret Sweeney, Ires chief executive, told industry analysts yesterday that the listed company was uncertain about whether a new government would freeze rents or further restrict landlords from increasing them.

However, she dismissed suggestions that Ires could stall on building new apartments or adding to its current total until it knows which parties are likely to form the next government.

Ms Sweeney said Ires had recently hired a builder to begin work on 61 new apartments at Bakers Yard in Dublin city centre, which she said should be finished next year.

She added that the company was continuing with preliminary work on plans for more than 500 new dwellings in Sandyford in south Dublin, including Rockbrook, where Ires has permission to build 428 apartments.

Work is ongoing on several apartment developments in the capital that Ires is funding, including Hansfield Wood on the city’s northside and Merrion Road in its southern suburbs.

“The fundamentals here are very strong,” Ms Sweeney stressed during a call with stock market analysts on Thursday.

Jobs record

She pointed out that the Central Statistics Office this week said that a record 2.36 million people had jobs in the Republic in the final three months of last year.

However, in a statement published with Ires’s financial results for 2019, Ms Sweeney warned that future government policy on housing was uncertain following the election.

“This uncertainty is likely to continue for some months until a new government is formed and provides greater clarity on policy intentions,” she said.

Sinn Féin, which favours freezing rents, is the second-biggest party in the Dáil with 37 seats, and could be part of whatever government ultimately emerges.

Ires plans to have 3,885 apartments by the end of this year and will continue growing through buying existing blocks or paying for the construction of new ones.

The landlord’s profits fell more than 28 per cent to €86 million last year from €86.3 million in 2018, as the rate of increase in the value of its properties slowed.

Reits calculates its profits by combining net income from rents with the increase in the value of the real estate it owns.

Average rent

Net income rose 22 per cent in 2019 to €50.5 million from €41.2 million. The value of its properties increased by €56.2 million last year, compared with €92.6 million in 2018.

The overall value of the apartments the Dublin-listed property investor owned rose to €1.36 billion last year from €921 million in 2018.

Its tenants paid an average of €1,596 last year. That figure rose to €1,905 for those living in the company’s Beacon South Quarter block in Sandyford while the average monthly payment in Semple Woods, Donabate, north Co Dublin, was €790.

Most of Ires’s properties are in Dublin, but the company acquired 50 apartments on Rochestown Road, Cork city, when it bought a group of buildings dubbed the “Marathon portfolio” last year.

Ires intends paying shareholders a dividend of €16.1 million or 3.1 cent a share. Investors shared a €14 million payout for the six months ended June 30th, 2019, last September. Ires Reit shares closed 1.28 per cent up at €1.58.