IRES REIT expects rental shortage to fuel growth

One of the country’s largest residential landlords is expecting significant growth during 2016 despite the Government’s two-year rent freeze introduced late last year.

Irish Residential Properties REIT (IRES) had a strong year with profit to the end of December coming in at €30.8m.

Basic earnings per share of 8.4c came in short of broker projections of 9.8c while IRES declared dividends of €13.1m, or a dividend per share of 3.2c.

All the signs point towards a strong 2016 too with the shortage in available rental properties likely to drive growth, according to IRES chief executive, David Ehrlich.

“Using available financing with our new credit facility, our pipeline of future acquisition opportunities and development intensification opportunities — enhanced by relaxed building regulations within our existing properties, the growing Irish economy and a severe supply and demand imbalance which is likely to extend for a number of years, our prospects for continued bottom line growth are very positive notwithstanding the new government limitation on increasing rents every two years which we believe will be a timing matter as rents continue to grow,” said Mr Ehrlich.

IRES had a portfolio of 14 properties at the end of December with over 1,610 units under management, while average rent was largely flat from its last update at €1,372.

The company also announced that it has began work on 68 additional units at Beacon South Quarter in Sandyford with construction expected to last 16 months.

It also has capacity to develop up to 650 units on its existing landbank subject to planning approval.

Meanwhile, Hibernia REIT issued an interim management statement in which the investment fund outlined a high level of interest in its buildings from potential tenants.

It continues to make good progress with its development and refurbishment programme with contractors on site at Cumberland House in Dublin and marketing underway to find a tenant for the two floors of the building not occupied by Twitter.

Hibernia said it is continuing to evaluate its options after BNY Mellon decided to vacate the Hanover Building in December of this year.