Irish Residential Properties Reit (Ires) yesterday announced the latest expansion in its portfolio on apartments for rent with the acquisition of 152 units at Ashbrook in Clontarf, Dublin 3, for €66 million.
That equates to a racy €434,000 per unit, with some 58 of the properties being one-bed or studio apartments. This deal is expected to deliver a gross yield of 4.9 per cent to the country’s biggest institutional landlord.
The expansion of Ires in the Irish market over the past five or six years also tells us something about the recent growth in property prices here. In 2015, it paid an average of €211,000 to acquire 92 apartments at Tyrone Court in Inchicore, Dublin 8. Roll on three years, and it was paying €312,500 per unit for 128 apartments at Hampton Wood in Finglas, on Dublin’s north side.
A year later, the average price paid for 815 units in the Marathon acquisition (comprising apartments in Dublin and Cork) was €349,000. In December 2020, just before a near six-month lockdown of the economy was introduced to contain the spread of coronavirus in advance of the vaccine programme being largely rolled out, it agreed to pay an average of €411,000 for 146 units at the former Phoenix Park Racecourse. And now this latest deal in Clontarf.
Of course, the mix of apartments involved in these various deals differs from location to location. And some of them attract higher rents than others by virtue of their location and specification.
According to a myhome.ie report this week, the median price of two-bedroom apartments in Dublin in the fourth quarter of 2021 was €260,000, which was flat on the year. Caveats apply, as these are the asking prices of individual units offered for sale on myhome.ie at a particular point in time.
Nonetheless, Ires is prepared to pay a premium to acquire apartments for rent in Dublin secure in the knowledge that a solution to the accommodation crisis in the capital (which is more than a decade old) is not close to hand and that rents and yields will remain strong for the foreseeable future.