Ires seeing ‘exceptional demand’ as review continues

The strategic review pledged by listed landlord Ires Reit in a pact with activist investor Vision Capital will bid to tackle the gap between its property values and share price, according to chairman, Hugh Scott-Barrett.

Shareholders at the company’s annual general meeting on Friday raised the issue of the sharp discount at which its shares traded when compared with the value of the apartment blocks the company owns in Dublin and Cork.

Mr Scott-Barrett acknowledged that the shares traded at a discount to net asset values. “The strategic review is looking at ways to narrow that discount,” he said.

Ires is reviewing its business, letting those apartments to tenants, as part of a deal with Vision Capital that stalled the latter’s bid to have the company or its properties sold to realise value for shareholders.

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The investor also nominated Amy Freedman and Richard Nesbitt to the Ires board as part of that settlement. Friday’s meeting confirmed both as non-executive directors.

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Mr Scott-Barrett and chief executive Eddie Byrne took over their roles in February. Speaking after the agm, the chairman noted that he and Mr Byrne had taken pay cuts relative to their predecessors.

Mr Byrne’s basic pay is €475,000 a year, more than 13 per cent less than former chief executive Margaret Sweeney. Mr Scott-Barrett’s fees are €175,000 a year, 12.5 per cent less than his predecessor, Declan Moylan.

“Both internally and externally costs are a major area of focus,” the chairman said. He was answering concerns raised about the previous chief executive’s pay and bonus, and Ires’ non-finance costs, which were €4.4 million last year.

In a statement, the company said it saw “exceptional demand” during the first three months of the year.

The landlord recorded an occupancy rate of 99.5 per cent during the quarter, it said in a statement ahead of its agm.

Revenue fell 3.9 per cent as a result of asset sales completed in late 2023, Ires said, while net rental income margin was in line with the first quarter a year ago. More than 99 per cent of due rents have been collected, it added.

Ires has raised concerns about the Republic’s rent cap, which limits increases in designated zones to 4 per cent.

The company argues that the measure deters businesses from investing in building new apartments, hindering supply at a time when the State is wrestling with a housing crisis.

“We continue to believe the medium-term outlook for both the PRS sector in Ireland and the Ires portfolio remains positive, underpinned by strong levels of demand which far outstrip supply,” Mr Byrne said in the statement.

“We are continuing to conduct a thorough and comprehensive strategic review at pace, which is attempting to unlock the inherent value contained with the Ires operating platform and maximise value for shareholders.”

Ires’s loan-to-value ratio rose marginally to 44.7 per cent, which is “well within” the firm’s banking covenants and Irish rules around a Reit’s leverage.

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