Losses widen at landlord Ires Reit despite growth in revenue

I-RES REIT Chairman Declan Moylan and CEO Margaret Sweeney following the company's EGM on Friday 16 February 2024

The country's largest private residential landlord, Ires Reit saw its net rental income rise by 3.3% in 2023, totalling €67.9m in what has been called a "strong and resilient" year for the firm.

The Dublin-listed property investment company said revenue grew by 3.5% to almost €88m despite a "challenging" economic climate in 2023, driven by the impact of new supply in the previous year and rising rent prices across the firm's existing portfolio.

However, a surge in costs saw losses widen to €116m in 2023, up from €11.8m in the previous year. 

Finance costs in the year amounted to €26.7m, up almost 59% on the previous year, with the firm's portfolio value dropping by 15% to €1.27bn at the end of 2023. 

The company attributed the decline to a disposal of assets as well as a yield expansion due to rising interest rates and low transactional activity in the market.

"2023 was characterised by increasing interest rates, persistent inflation and broader geopolitical challenges," said Ires chief executive, Margaret Sweeney.

"However, our focus on our strategic objectives allowed us to strengthen our balance sheet and position the Company for a return to growth in 2024."

Ires said its revenue performance was supported by occupancy levels of 99.4%, which was unchanged compared to the previous year. The average monthly rent charged across its overall portfolio rose by 1.4% to €1,774 in 2023. 

The property firm owns 3,734 apartments and houses for private rental in Dublin and Cork.

It added that the average monthly rent for new tenancies in Dublin was €2,113 between July and September 2023, an increase of around 10% compared to the same period in 2022. In Cork, the private landlord posted 100% occupancy, with average monthly rent in the county at just over €1,400.

The company's annual results come just one week after it defeated an attempted shareholder revolt at an extraordinary general meeting (EGM), as investors voted against a plan by an activist investor to replace five directors and pursue a sale or break-up of the business.

The board also intends to declare a dividend of 2 cents per share for the period, bringing the total dividend to 4.45 cents per share. This is down from 5.11 cents in the previous year.

Ires said it would now commence a strategic review that it had first announced in early January to consider all strategic options to maximise value for shareholders.

The firm said these include consolidation, mergers, a review of the company as a listed Reit, the sale of the entire issued capital of the company and the sale of assets.

As previously announced, Ms Sweeney will step down as CEO in April.