Ireland's largest landlord posts a loss of nearly €44m after portfolio reevaluation 

Loss attributable to higher interest rates and inflation, company said

Margaret Sweeney, chief executive of Ires Reit, said the company has not been immune to the recalibration in the real estate sector following interest rate hikes. 

Ireland’s largest landlord Irish Residential Properties Reit (Ires) has reported a loss of €43.9m for the first six months of the year following a reevaluation of total property value given the higher interest rates and inflation.

In its half-year financial results, published on Thursday, Ires said revenue grew by 5.2% to €44.3m compared to the same period last year. Net rental income for this period came to €34.3m, up 5.1%, on the back of a 99.5% occupancy level.

The company’s average monthly rent per unit increased to €1,772 as of the end of June — up from €1,688 during the same period in 2022.

This led to earnings before interest, taxes, depreciation and amortisation of €28.7m.

However, despite this, the company said it was posting a loss of €43.9m which “can be attributed to a €56.5m non-cash revaluation of our total portfolio value”.

The company said this “reflects an increase in yields and weakening in values across the real estate sector, which is attributable to the higher interest rate and inflationary environment”.

Margaret Sweeney, chief executive of Ires, said the company has “not been immune” to the “wider recalibration of real estate sector values and our portfolio value fell in the first half of the year”.

“While uncertain conditions may persist, our performance illustrates the resilience of our high-quality assets and efficient operating model,” she said.

During the first six months of the year, the company sold assets valued at €22m.

It has also agreed to sell 194 units for gross proceeds of just over €72m. The first closing of this sale is expected before the end of August and will include 91 units for €38.1m, with the remaining units expected to close within this calendar year.

Ires Reit said it intended to declare an interim dividend of 2.45c per share for the first half of the year, an increase of 6.5% on the prior year.

As of the end of June, IRES’s portfolio was valued at just over €1.4bn. The portfolio comprises 3,930 apartments and houses, mainly in Dublin.