New rental rules freeing up capital for apartments, country's largest landlord says

I-RES REIT reported average monthly rents of €1,884 per month in the first half of the year

I-RES REIT's portfolio continues to be effectively fully occupied at 99.4%, which it said reflects the strong underlying demand for high-quality rental properties in Dublin.

New rental regulations which came into effect in March have helped free up capital to deliver new accommodation, the CEO of I-RES REIT said.

Publishing their trading update for the first half of the year, the company, one of the country's largest landlords, said annual income from rents grew 2.1%.

It reported profits after tax of €48m, up sharply from €16.3m a year earlier. The firm acquired 77 new units in Naas to bring its portfolio to 3,611 residential units, down from 3,652 a year earlier.

I-RES reported average monthly rents of €1,884 per month, up 1.7% from the end of December. The company said its portfolio continues to be estimated at approximately 20% below market rent.

Their portfolio continues to be effectively fully occupied at 99.4%, which it said reflects the strong underlying demand for high-quality rental properties in Dublin. Turnovers for the period of 6% remained in line with the prior period.

The new regulations in March meant rents for new tenancies are initially set at the market rate and future rent increases are linked to the lower of CPI or 2%.

I-RES CEO Eddie Byrne said the changes were a welcome step forward for the Irish property rental sector. 

"It provides much-needed certainty for residents, operators and investors, improving the outlook for investment returns and creating a more supportive environment for the delivery of new rental accommodation," he said.

"The revised framework has unlocked renewed capital flows into the sector, which should improve development viability over time and support a healthier, more sustainable rental market. 

"As part of our continued focus on disciplined growth, our forward purchase agreement to acquire 77 high-quality apartments in Naas demonstrates the strategic re-investment of capital generated through our asset recycling programme into portfolio-enhancing opportunities."

He said the firm is actively considering further opportunities to re-invest and grow the business.

The board of the company decided to declare a dividend of 2.50 cents per share for the six months ended June 30, in line with the company’s dividend policy of paying out 85% of property income from the business.

I-RES' share price is up almost 19% since the start of the year.