Ires Reit’s Canadian founder, property investment firm Capreit, sold its remaining 9.7 per cent stake in the apartments owner to a number of investors, with an opportunistic UK fund emerging as one of the main buyers.
The placing of shares, which sources say was carried out by Goodbody Stockbrokers on Capreit’s behalf on Wednesday, comes as Ires continues to carry out a strategic review of its options as its shares trade at a deep discount to their intrinsic value.
London-based Asset Value Investors, an activist type of investors that had built up a 4.25 per cent stake in Ires in recent months amid speculation it could be sold or broken up, has now increased its interest to 6.33 per cent.
Dutch investment house Ophorst Van Marwijk Kooy Vermogensbeheer has increased its holding to 1.48 per cent from 1.16, while Barclays has upped its interest to 1.47 per cent from 1.13 per cent and Goodbody’s stake has risen to 2.85 per cent from 1.41 per cent.
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Capreit, which assembled Ires’s initial portfolio of 338 apartments and managed its initial public offering (IPO) in 2014, started reducing its then 18.7 per cent stake in the Dublin-based company in February. The sale of the final batch of shares removes a significant overhang of stock in the hands of a shareholder that no longer wanted to be invested.
The 50 million shares were sold at a price of 90 cents each, 2 cents below where the stock closed on Wednesday. Ires valued its net assets at the end of last year at €1.32 per share.
The share placing comes as the Irish property company continues a strategic review, having entered into a truce in April with Vision Capital, a Canadian investor with a 5 per cent stake that had been waging a public campaign for a year for a sale or break-up of the company. Vision has secured two board seats as part of the settlement.
The Canadian group had backed failed efforts by Vision in February to replace five Ires directors and secure a mandate from shareholders to pursue the sale or break-up of the company, which now has 3,734 residential units, within two years.
Capreit earned almost €50 million in asset and property management fees from Ires between the IPO and a move by the Irish company to bring management in-house two years ago.
[ Canada’s Capreit sells remaining shares in Irish property group IresOpens in new window ]
Ires Reit’s strategic review started at the end of February and is now being led by its new chairman Hugh Scott-Barrett and chief executive Eddie Byrne. The company said in late April a move to sell all the apartment owner’s assets in the current environment “would be challenging to maximise value for shareholders in the short-term”, as it continues to carry out a strategic review of its future and its shares continue to trade at a deep discount.
While the board said it believes the medium-term outlook for the Irish private rental sector is “positive”, it continues to be affected by short-term headwinds such as higher interest rates, restrictive regulation including on rent increases, a lack of deals activity, and concerns about the upcoming general election.
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